Friday, 13 May 2011

Mergers & Acquisitions - Week Ending 13/05/11

Setting the tone for what was quite a slow week, Monday brought only two major deals. Biotech giant Alkermes bought the drug delivery end of Elan for around $960Mn and finished the day up almost 5%. This was followed by news that Linn Energy was to purchase $220Mn worth of oil and gas assets in the Southern US. This announcement was met positively from investors, and it closed up 1.5%.Tuesday saw activity in the IT sector as Microsoft purchased Skype for 8.5Bn in cash, saving an estimated $30Mn by not using an advisor on the deal. Investors reacted somewhat optimistically to the deal, and Microsoft finished the day up 1%. Also that day, Apollo Global Management purchased CKx Inc for 511Mn in cash. The buyer was up just over 1% at market’s end.

The activity died down for mid-week, with the only M&A action seeing Industrial manufacturer Idex Corporation purchase CVI Melles from Norwest Equity Partners for $400Mn, as it increases its presence in the optics market. This wasn’t enough to stop Idex’s slump, however; they finished down over 1%.On Thursday, Exelon Corp purchased a natural gas power plant for $305Mn as it looks to strengthen its clean power fleet. It finished up 1.7%. Also in the energy sector, Constellation Energy said it will purchase MXEnergy for $175Mn, expanding its operations in the North American market. This boosted Constellation’s stock price by 2.3%.

At week’s end it was announced that Alcoa would collaborate with the China Development Bank in several aluminium projects in China and further afield. The Asian deal did little to help Alcoa’s price, however; they were down 0.3% at week’s end. Atmos Energy sold its natural gas distribution assets to Algonquin Power & Utilities Corporation for $124Mn in an all-cash deal. This cash injection didn’t have much effect on their equity however, and they ended the week down almost 1%.