Friday, 21 October 2011

Mergers & Acquisitions - Week Ending 21/10/11


On Sunday, it was announced that energy firm Kinder Morgan would buy rival El Paso Corporation for $21.1 billion. The recent surge in natural gas production is said to be behind the deal; one of the largest ever in the sector. The following day saw the target up 24.8%, reflecting the large premium being paid, while the buyers were also up 4.8%. Also that day, technology and imaging firm Eastman Kodak agreed to licence many of its patents to IMAX in a bid to raise money to turn itself around; having posted only one annual profit since 2004. The price tag was said to be just below $50 million. The sellers rose 4.8% as the motion picture group fell 4.6%. On Monday, G4S acquired its competitor ISS for $8.2 billion. Despite this move giving them a presence in the catering and cleaning markets as well as helping their reach into emerging markets, the world’s largest security business closed down 21.3%. Statoil purchased Brigham Exploration Company for $4.4 billion, expanding its presence in North American oil. The Norwegian integrated energy company lost 2.66% on the news. Also that day in energy, the US’ largest propane provider AmeriGas took over Energy Transfer Partners’ propane gas unit in a deal worth $2.9 billion. The vendor gained 5.4% while AmeriGas dropped 4.2%.

The midweek saw Alcatel-Lucent sell call center provider Genesys to Permira, a private equity firm, for $1.5 billion in an all-cash deal. The telecommunications giant fell 12.2%. Also that day, Abbott Laboratories said that it planned to split into two public companies, one medical device and diagnostics unit and one focused on pharmaceutical innovation. They were boosted 1.5%. On Thursday, Cisco Systems bought BNI Video, a provider of video delivery software, for $99 million. The buyer is looking to integrate BNI’s technology into its Videoscape project. This move had virtually no effect on the IT business’ share price. The following day, Banco Santander sold a 35% stake in its automotive financing unit ‘Santander Consumer USA’ to a group of private equity firms in a $1.15 billion deal. This comes as the Eurozone’s largest bank looks to improve its balance sheet. The seller’s price was lifted 2.6%. Also that day, Bain Capital acquired Japanese restaurant chain Skylark from a group of investors including Nomura for $2.1 billion. The financial services company finished the week up 2.2%.