Friday, 2 December 2011

Mergers & Acquisitions - Week Ending 02/12/11


On Monday, the Tokyo Electric Power Company sold its shares in KDDI back to the mobile network operator for $2.4 billion. This firm has been unwinding much of its assets since the Tokyo Earthquake in an attempt to raise money to compensate victims of the Fukushima Nuclear Disaster. The seller gained 1.8%, while KDDI was up 0.6%. Also that day, KKR purchased Capital Safety, a producer of fall protection equipment, for $1.12 billion. The private equity firm said that they saw growth in the industry due to increasing safety regulations in developing countries as well as its dependency on the energy and infrastructure sectors. The buyer was boosted 8%. The nest major deal came on Thursday, when BP sold its Canadian natural gas unit to Plains All American Pipeline for $1.67 billion in an all-cash deal; the latest in a string of sales aimed at strengthening its balance sheet. The global energy giant fell 1.8% as Plains finished 1.7% higher. There was also action in the electronic design automation market as Synopsys bought Magma Design Automation for $507 million. They believe that R&D will be a lot more productive in the new firm. Synopsys finished 1.7% lower while the target was elevated a massive 24.7%, reflecting the large premium being paid.

The following day, Heineken acquired a chain of 918 British pubs, known as the Galaxy Pub Estate, from RBS for $646 million. The British bank has divested much of its noncore assets in the face of a worsening economic environment in recent years. The brewer was down 1.7% while the vendor increased by 3.9%. Verizon attained 122 spectrum licences for $3.6 billion from a group of firms including Comcast and Time Warner. These licences allow the expansion of wireless networks, which the bidder will utilise as demand for its services increase. Verizon was relatively unchanged, as Comcast and Time Warner gained 3.5% and 0.6% respectively. Also that day, Google‘s $400 million takeover of Admeld, a provider of online display advertising, was approved by the Justice Department. The online giant’s motive is to advance from its traditional text based offerings into advertising which includes images and video. The world’s largest search engine had grew 1.1% by the bell.