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%.