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.