Saturday, 12 November 2011

Mergers & Acquisitions - Week Ending 11/11/11


On Monday, Best Buy purchased the full stake in its cell phone joint venture, ‘Best Buy Mobile’ from its partner Carphone Warehouse Group for $1.3 billion. Although cancelling plans to open more stores in Europe, Best Buy Mobile has been expanding rapidly in North America. The seller gained 1.1%, while the electronics retailer lost 3.1%. The following day, Italian suit maker Brioni was bought by PPR for an undisclosed fee (expected to be around $450 million). The French luxury goods group are hoping to attain a larger presence in the men’s fashion market, despite already controlling Gucci and YSL. They closed 2.4% higher. Also that day, Yum! Brand’s $566 million acquisition of the Little Sheep Group, was cleared by the Chinese Regulator. The Mongolian hot-pot retailer is currently the largest restaurant operator in China. The news was met extremely positively on the markets; the target was boosted 15.2% while the bidder was grew by 1.8%.

The next wave of deals came on Thursday, when Mitsubishi Corporation announced its largest mining deal ever; buying almost 25% of Anglo American’s Chilean Copper assets for $5.39 billion. Despite this move doubling the copper output of the Japanese giant, they fell 4.9% as their counterparty was up 3.6%. Tekelec was purchased by a private group led by Sirus Capital for $780 million. The telecoms firm increased 14% by the bell. Also that day, Starbucks took over juice maker Evolution Fresh for $30 million in an all-cash deal. They are looking to project the success of their coffee products onto healthier offerings in the juice industry. The US’s largest coffee chain gained 1.3%. The following day, China’s largest oil refiner Sinopec purchased a 30 percent stake in the Brazillian operations of Galp Energia for $5.2 billion. They are the latest in a string of growth-oriented Chinese companies investing to obtain new energy resources. The buyer was up 2.5% while Galp dropped almost 11%. Also that day Vivendi, owner of the Universal Music Group, bought the music division of the EMI Group from Citigroup for $1.9 billion. The deal must be cleared by competition authorities in Europe before contracts can be signed. The French media and telecommunications company was boosted 2.6% as the seller closed 2.4% higher.