Friday, 22 July 2011

Mergers & Acquisitions - Week Ending 22/07/11


The weekend brought the news that Hertz Global Holdings would purchase the Donlen Corporation, a vehicle and equipment leasing company, for $250 million in cash. Despite this acquisition adding long term leasing to Hertz’s existing car rental business, they were down 0.7% on Monday; possibly due to them assuming $680 million of Donlen’s debt. The next major deal came in the midweek when Nalco, a water treatment company, was purchased by Ecolab for $5.4 billion. The largest takeover ever by the disinfectant maker was met by negative sentiment from its shareholders; it was down 7.4%. Nalco was up over 24%, reflecting the large premium that they had commanded. OPTI Canada, an oil sands producer which had filed for bankruptcy, sold itself to China National Offshore Oil Corporation for $2.1 billion. The buyer was down 4.4%. Later on Wednesday, Randstad Holdings purchased the SFN Group for $710 million; doubling its HR presence in the US. The buyer was boosted 3.8% on this news, while SFN rose 53%, mirroring the premium offered.

Thursday saw Express Scripts buy Medco Health Solutions for $29.1 billion, making the buyer the largest pharmacy benefits manager in the country. There has been increased consolidation in the health sector as of late due to the US government’s health insurance reform. Express’ stock gained 5.3% and Medco increased by 14.4%. Fridge was purchased by Google for an undisclosed fee as part of its social networking project, Google+. The world’s most popular search engine was up almost 2%. On Friday, News Corporation sold its Russian billboard company News Outdoor Russia to a consortium led by a Kremlin-controlled bank. This is not believed to have any connection with the scandal in which the media giant is currently involved. The sellers finished the week down 0.4%.