Friday, 30 September 2011

Mergers & Acquisitions - Week Ending 30/09/11


On Monday, Alibaba announced that it would spin off HiChina, its web hosting unit. The Chinese tech firm was down 8.4%. Also that day, Berkshire Hathaway said that it would buy back up to $23 billion worth of its shares in order to support their dwindling price. This comes as a surprise to many who believed that Berkshire’s $43 billion in cash had been earmarked for acquisitions. The conglomerate, which has the highest share price on the market, was up 8%. The following day, RenRen purchased 56.com, which hosts video content uploaded by users, for $80 million. The Chinese social networking site finished the day 4.5% higher.

The other two deals of the week came on Thursday, when Saab Automobile sold its Spyker Cars unit for $43.5 million to North Street Capital, a private equity firm. This deal is the latest in a string of efforts to save Saab. The Swedish car manufacturer was down 1.2%. Also that day, Nationwide Mutual Insurance acquired fellow insurer Harleysville Group for $1.6 billion. The Pennsylvania-based firm will be absorbed by Nationwide’s property and casualty unit. The target was boosted a massive 87% by the bell, reflecting the huge premium tendered by Nationwide.