Friday, 12 August 2011

Mergers & Acquisitions - Week Ending 12/08/11

It appears as if last week’s US debt agreement has failed to foster any lasting confidence on Wall Street, with this week seeing only two deals. The first of these came on Tuesday, when Sara Lee agreed to sell its North American refrigerated dough unit to Ralcorp for $545 million. This comes as both food companies are adjusting strategy; Sara Lee is preparing to split its food and beverage divisions and Ralcorp is spinning off cereal making unit ‘Post Foods’ to shareholders. The buyer was up 1%, while Sara Lee was boosted 4.4% on the news. The following day it was announced that Capital One would acquire the US credit card unit of HSBC in a $2.6 billion deal. This follows HSBC’s sale of almost 200 branches in New York and the layoff of 30,000 employees in a massive cost cutting effort. It is now looking to concentrate more on emerging markets and corporate lending. The seller fell 7.6%, while the Capital One rose 0.6%.