Mergers & Acquisitions - Week Ending 03/09/12

On Monday, American International Group sold $6 billion worth of shares in American International Assurance. When the insurer received the government bailout, its Asian counterpart was put in a special vehicle by the government. Since then, AIG has sold parts of this to try and repay the $182 billion bailout. This latest deal sees its stake reduced from 33 to 19 percent. The vendor gained 3.2% as AIA lost 0.7%. The following day, KKR entered into a $250 million partnership with Chesapeake Energy. This move, which looks to expand the firm’s royalty acquisition business, is the latest in a series of private equity deals in the energy sector. KKR fell 1.8% while the US’ most active driller dropped 2.8%. Also that day, AmerisourceBergen Corporation purchased rival World Courier Group for $520 million in an all-cash deal. This will allow the pharmaceutical service firm to add speciality logistics to its portfolio. The buyer closed 0.7% lower.

The midweek saw HSBC divest its Asian and Latin American insurance units to AXA and QBE Insurance for $914 million. This deal is part of its plan to focus on its more profitable Banking and Wealth Management units while cutting costs. Both AXA and the seller were up by 1.8% and 0.7% respectively, while QBE were relatively unchanged. On Friday, the London Stock Exchange group acquired clearinghouse LCH.Clearnet for $612 million. There has been much consolidation by major exchanges of late, aimed at widening margins and strengthening profits. The deal will allow the British exchange to earn extra fees should European regulators force OTC transactions to use clearinghouses as intermediaries. The bidder closed 7.5% higher. Also that day it was announced that Insight Capital Partners would buy Quest Software for $2 billion. Quest are excited by the prospects that privatisation brings, such as additional flexibility with regard to new product lines. The enterprise systems firm was boosted 24%, exceeding the large premium being paid.