Friday, 27 January 2012

Mergers & Acquisitions - Week Ending 01/27/12

On Monday, Apache Corporation purchased Cordillera Energy for $2.85 billion. This is the latest in a string of deals involving shale formations, which are recovered using a controversial process known as fracking. The oil and gas firm gained 1.6% on the news. Also that day, Pan American Silver bought rival Minefinders for $1.5 billion. Precious metals prices remain high as investors look beyond stocks for safer investments. Pan American is looking to be the world's largest producer of silver. The bidder fell 9.8% as the target jumped almost 23%. The following day, HSBC sold its operations in Costa Rica, El Salvador and Honduras to Banco Davivienda of Colombia for $801 million. This comes as Europe's largest bank look to cut costs by divesting its less profitable units. The vendor was down 0.2%. Also that day, SPX Corporation spun off its auto tools unit to Robert Bosch for $1.15 billion. The industrial giant is looking to shift its focus to its tech unit. SPX were up 1.6%.

Thursday saw 2 major deals in the glowing biotech sector. Amgen took over blood cancer and tumour specialist Micromet for $1.16 billion. The buyer grew by 1.6% while Micromet was boosted a massive 32% mirroring the premium offered. Following this, Celgene acquired Avila Therapeutics for $575 million. The firms expect to see significant synergy in their Cancer offerings. Celgene dropped 1.5%. The following day, Eastman Chemical absorbed rival chemical company Solutia in a $3.38 billion deal. It believes that this purchase will enable expansion into developing markets, like China. The bidder increased by 7%, while the target soared 41%, reflecting the large premium being paid.

Friday, 20 January 2012

Mergers & Acquisitions - Week Ending 01/20/12

In what was an unusually sluggish few days, Tuesday saw the week’s only two deals. Royal Bank of Scotland sold its aircraft leasing unit to a group of Japanese investors led by Sumitomo Mitsui Financial. Motives behind the $7.3 billion deal include the buyers' aim to develop SMFL Aircraft's presence in Asia, and the seller’s aim to strengthen their Tier 1 ratio. The Japanese financial firm gained 1.2%, while RBS were up almost 2%. Also that day, DS Smith purchased the packaging unit of Svenska Cullulosa, a Swedish consumer goods firm, for $2 billion. This deal comes as the recycled packaging manufacturer looks to increase its European market share. The bidder and vendor rose 3.2% and 10.5% respectively.

Friday, 13 January 2012

Mergers & Acquisitions - Week Ending 01/13/12

On the weekend, it was announced that Bristol-Meyers Squibb would buy Inhibitex, a hepatitis C treatment provider, for $2.5 billion in an all-cash deal. This is the latest in a string of niche deals by drug companies attempting to compensate for losses due to their generic counterparts. On Monday, Inhibitex was boosted a massive 140% trailing the huge premium offered, while the pharmacutical giant was down 0.9%. The midweek saw Apple confirmed its purchase of Anobit, which manufactures the flash memory found in several of its product lines. The price tag is believed to be in the range of $500 million; should this be the case, it would be Apple's largest acquisition to date. The tech giant was down 0.2%. Also that day, Raymond James bought fellow broker Morgan Keegan from Regions Financial for $930 million. Regions is expected to use the proceeds to pay back its 2008 government bailout; it is the only major lender who is yet to do so. The bidder was relatively unchanged as the vendor saw a 2.1% increase.

On Friday, Lions Gate Entertainment took over Summit Entertainment in a deal worth $412 million. Despite the move strengthening Lions Gate's film library and home entertainment lines, they dropped 1.3%. Also that day, Carl Icahn acquired a 14.5 percent stake in CVR Energy for $115 million. The prolific investor believes that shares in the petroleum refiner are undervalued. Although shares had risen 3.6% by the bell, management reacted defensively, saying that a shareholder rights plan would be triggered if Icahn increased his holdings further.

Saturday, 7 January 2012

Mergers & Acquisitions - Week Ending 01/06/12

On Monday, French oil firm Total said it would buy a 25 percent stake in Chesapeake Energy's Ohio shale operation for $2.32 billion. They are expected to use the proceeds to reduce debt or for development. The buyer and seller were up 2.7% and 5.9% on Tuesday. The following day saw further action in the oil sector, with Sinopec International purchasing 30 percent of 5 shale projects being undertaken by Devon Energy. This $2.2 billion deal allows Devon to recover its initial outlay and reduce future capital commitments. The bidder and vendor gained 6.1% and 6.6% respectively.

Also that day, diversified technology firm 3M acquired the office and consumer products division of Avery Dennison for $550 million. Possible motives behind the deal include the target's product lines, retail branding and strong balance sheet. Both companies rose around 2.2%. On Thursday, FIAT increased its stake in Chrysler to 58.5 percent. This news comes after Chrysler got regulatory approval for a new energy efficient product line. The Italian auto manufacturer grew 3.3% by the bell.