Friday, 27 April 2012

Mergers & Acquisitions - Week Ending 04/27/12

Setting the pace for what was a hectic start to the week, Nestlé purchased Pfizer’s infant nutrition unit for $11.9 billion. The deal, which is the largest in Nestlé’s history, will help the Swiss food giant to increase its presence in emerging markets whilst allowing the pharmaceutical group to focus on its core business. The news was met negatively on the markets, with the buyer and Pfizer falling 2% and 0.8% respectively. Monday saw two other pharmaceutical deals. AstraZeneca bought rival Ardea Biosciences for $1.26 billion. This is expected to give the bidder access to several attractive new products, including a new drug for the treatment of gout. AstraZeneca lost 1.5% as the target soared 52%, reflecting the large premium being paid. Thomson Reuters sold its healthcare unit to Veritas Capital for $1.25 billion. The sale will help provide the ailing analytics firm with some much needed cash. The seller closed 1.4% lower. Edinburgh Airport was purchased for $1.3 billion by Global Infrastructure Partners. GIP, which owns several airports already, is looking to harness its extensive experience to strengthen Edinburgh’s performance. The fund’s two main shareholders, Credit Suisse and General Electric were down 1.8% and 1.5% respectively. Vodafone acquired fellow telecoms firm Cable & Wireless for $1.7 billion. This will supplement the group’s wireless offerings with fixed line services, as well as increasing their fiber optic data line. Cable and Wireless gained 0.6% while the world’s second largest mobile carrier was relatively unchanged on the news. Later that day, Barnes & Noble received a much needed boost when Java Partners, an activist hedge fund, took a 12 percent stake in their company. The troubled bookseller is looking to revive their company through investing in a digital strategy, which is unproven as of yet. The stock was boosted over 18%.

The following day, AlixPartners was taken over by CVC Capital Partners in a deal believed to be in the range of $1 billion. The restructuring specialist has derived much of its custom in the past few years from stale economic conditions. The private equity firm’s backing should help it pursue global dominance. Building on the previous day’s biomedical news, Tuesday saw Amgen buy a 96 percent stake in Turkish pharmaceutical firm Mustafa Nevzat for over $600 million. They are looking to increase their presence in Turkey, a key growth region. The buyer grew by 0.5%. This trend continued into the midweek, with Watson Pharmaceuticals purchasing Actavis for $5.9 billion. The move, which is expected to create one of the world’s largest generic drug manufacturers, is a product of Watson’s desire to expand internationally. The buyer was up 1.5%. On Friday, Wells Fargo absorbed Merlin Securities, a prime brokerage firm, for an undisclosed amount. Although this is their first attempt at prime brokerage, most large US banks now provide such services; no surprise when you consider the growth in the hedge fund industry in the past decade. Wells Fargo dropped almost 1%.

Friday, 20 April 2012

Mergers & Acquisitions - Week Ending 04/20/12

On Monday, GDF Suez purchased the remaining 30 percent stake in International Power, a British utility firm, for $10 billion. This move is expected to expand GDF's reach in emerging markets. The French energy titan and International Power were up 2.9% and 3.5% respectively. Goldman Sachs sold $2.5 billion worth of shares in the Industrial & Commercial Bank of China to, among others, Temasek Holdings. The Singapore-based wealth fund has also recently bought stakes in other Asian banks despite whispers that they may be overvalued. The seller increased by 2.3%, while the world's largest bank was relatively unchanged. Also that day, Anheuser-Busch InBev took on a 51 percent stake in drinks producer CND for $1.2 billion. This deal will give CND the push to distribute products on a wider network in the Caribbean market they serve. The world's largest brewer grew by 1.7%. The following day, Toshiba TEC bought IBM's Retail Store Solutions unit for around $850 million. With the purchase, they are creating the world's largest point of sale focused company. Both IBM and the office machinery unit jumped 2.3% and 6.9% respectively.

The midweek saw Alimentation Couche-Tard absorb Statoil's Fuel & Retail unit for $2.8 billion. It is likely that the Canadian retailer is looking to strengthen its presence in Scandinavian and Eastern European markets. The buyer was boosted over 15% while the oil and gas firm fell 0.3%. SXC Health purchased rival drug benefits manager Catalyst Health for $4.4 billion. The news of consolidation comes as the industry is getting ever-more competitive; two of the largest managers merged, while other health firms are now setting up their own benefits schemes. The markets reacted positively; the bidder and target gained 11.3% and 34% respectively. Wow Internet, Phone & Cable acquire rival Knology for $750 million in an all-cash deal. The buyer said the move will expand its geographic reach. The broadband specialist increased by 7%. Later that day it was announced that Audi would buy Ducati for $1.12 billion. It is seen as a supplementary purchase more than anything else; their product lines have very little in common with the target focusing solely on motorcycles. There are said to be possible synergies in the manufacture of more efficient engines, however. Volkswagen's luxury car unit lost 0.6% on the news.

Friday, 13 April 2012

Mergers & Acquisitions - Week Ending 04/13/12

On Monday, web giant AOL sold and licenced more than 1000 patents to Microsoft in a deal worth around $1.1 billion. This comes as many tech firms look to bolster their patent stocks to keep an edge on each other. The vendor jumped a massive 43% on the news, while the world’s largest software firm fell 1.3%. AT&T unwound its majority stake in the yellow pages unit to Cerberus Capital for $950 million. The private equity firm has a big job on its hands; the business has lost significant ground due to online directories. The telecoms group dropped almost 1%. Facebook purchased Instagram, a photo sharing app, for $1 billion. The world’s leading social network is clearly looking to strengthen its mobile capabilities and possibly garner a little attention before its IPO which is expected next month. Also that day, Chesapeake Energy said it had raised $2.6 billion in cash on 3 major asset monetisation deals. This included the sale of shares in CHK Cleveland Tonkawa, a 3.75% royalty interest in their first 1000 wells, and 10 year VPP. On Tuesday, the US second largest energy company closed 3.6% lower.

The following day, the Shale boom continued as Penn Virginia Resource Partners acquired pipeline firm Chief Gathering for $1 billion. This move sees the buyer increase its foothold in the Marcellus Shale on the East coast of the US. The energy company was up 11.6%. Also that day, Corning bought a majority stake in Becton Dickinson’s biosciences division for $730 million. This will be absorbed by Corning’s life sciences division as part of its long term growth strategy. The deal wasn’t met positively on the markets; the bidder and the medical technology group lost 0.7% and 0.9% respectively. The midweek saw further action in health as Takeda Pharmaceuticals took over URL Pharma for $800 million. Despite this expanding the Japanese firm’s presence in the US, it decreased by 1.7%. The next day saw Facebook in the news again as it announced it would buy Tagtile, producer of customer loyalty software, for an undisclosed amount. Unlike Monday’s purchase, Tagtile is not expected to join with the social network’s current offerings. Also that day, fashion chain Nordstrom announced a $16.4 million partnership with online men’s brand Bonobos. The former gets online expertise to help boost sales while the latter gets to supplement its e-store by getting paid to sell its clothes on the high street. The buyer gained 0.8%.

Friday, 6 April 2012

Mergers & Acquisitions - Week Ending 04/06/12

On Monday, KKR purchased shale properties from WPX Energy for $306 million. This is the latest in a string of oil and gas deals by the private equity firm, this one focusing on the highly popular 'fracking' method of extraction. The bidder and vendor were up 1.2% and 2.4% respectively. DBS Group Holdings absorbed Bank Danamon for $7.2 billion. The deal, which is one of the largest in SE Asian financial services in recent times, sees DBS looking to tap into Indonesia’s rapid growth. The Singapore bank fell 1.1%. Also that day, Schiff Nutrition acquired Airborne for $150 million in an all-cash deal. The supplement manufacturer adds to the nutritional firm's vast offerings. Schiff gained almost 5%.
The following day, it was announced that the Molson Coors Brewing Company would buy StarBev for $3.54 billion. This comes as Molson Coors looks to move into the emerging Eastern European markets. They buyer was down 5.4%. Also that day, Royal Bank of Canada bought the 50 percent of RBC Dexia Investor Services it didn’t already own for $1.1 billion. Dexia, which provides other institutions with back office operations, will compliment RBC’s existing products lines and bolster its global presence. They dropped 2.8%. On Thursday, the Rothschild banking family consolidated their European businesses through their company, Paris Orléans. The holding company, which is listed on the French exchange, will buy stakes in their British investment bank N.M. Rothschild & Co. and their French asset manager. This is expected to strengthen their capital reserves and efficiency. Paris Orléans jumped 4.2% on the news.