Saturday, 24 December 2011

Mergers & Acquisitions - Week Ending 23/12/11


On Monday, Bi-Lo purchased rival [Winn-Dixie] for $560 million. This will allow Bi-Lo to expand its outlets into Tennessee, Georgia and the Carolinas. The food retailer was boosted a massive 70%, reflecting the large premium being paid. The following day, [Dexia] sold its Luxemburg operations to a Qatari investment fund for $952 million. This is the latest step in the dismantling of the Belgian-French bank, which has been bailed out twice since the financial crisis began. The seller was down 6.7%.

The midweek saw [Delphi Financial] being bought by insurer [Tokio Marine Holdings] for $2.7 billion. This will allow Tokio Marine to increase its presence in the US market following its takeover of Philadelphia Consolidated in 2008. The bidder gained 1.2%, while the target was up a whopping 73% mirroring the mark-up offered. [HSBC] agreed to spin off its Japanese private banking unit to [Credit Suisse] for an undisclosed fee. This sale is being seen as an attempt to reduce its costs and improve its capital base. The buyer was relatively unchanged on the news, whilst Europe's largest bank lost around 0.3%. Also that day, the [TMX Group] acquired a 16 percent stake in the Bermuda Stock Exchange. The transaction, for which price was undisclosed, represents the groups search for growth outside of the Canadian market. TMX closed 0.4% higher.

The following day, [Deustche Lufthansa] sold the unprofitable carrier BMI to the International Airlines Group for $270 million. The purchase is driven by IAG's aim to grow operations at Heathrow Airport, the world’s busiest by international passenger traffic. The vendor grew by 1.9%. Also that day, [Akamai Technologies] took over Contendo for $268 million. This will allow them to speed up their online offerings through cloud computing. They were up almost 19% by the bell.