Friday, 2 September 2011

Mergers & Acquisitions - Week Ending 02/09/11

On Monday, it was announced that Alpha Bank and Eurobank would merge, creating the largest lender in Greece; with assets totalling $212 billion. The banks hope to strengthen their capital positions in the face of the debt crisis. Both shares were boosted around 30%. AuRico Gold purchased Northgate Minerals for $1.48 billion. This is the latest in a string of such acquisitions in the face of soaring gold prices. The buyer was down 18.5%, while Northgate rose 28%. The following day saw further action in mining, as Macarthur Coal accepted a $5.2 billion bid from ArcelorMittal and Peabody Energy. The Australian mining firm has been the target of several acquisitions recently, and rose 0.4% upon its sale. ArcelorMittal and Peabody finished the day up 4.7% and 3.1% respectively. Also that day, Investor Carl Icahn has agreed to sell his $310 million stake in Lion’s Gate after a long struggle between him and management in the company. The global entertainment firm fell around 3%.

The midweek saw Sony, Hitachi and Toshiba merge their LCD businesses by working with a government backed fund in an attempt to defend against increasing foreign competition; with each of the Japanese electronics manufacturers taking a 10% stake in the venture. Hitachi rose 1.2%, while Sony and Toshiba rose 2.8%. On Thursday, IBM bought Algorithmics, a risk analytics company for $387 million. Despite this attempt to increase its presence in the financial services market, the buyer dropped 0.9%.