Friday, 4 May 2012

Mergers & Acquisitions - Week Ending 05/04/12


On Monday, Energy Transfer Partners purchased Sunoco for $5.3 billion. This, the latest deal in America’s thriving energy sector, is focused on increasing the ETP’s presence in the distribution of oil and natural gas. The pipeline operator was up 3.6% while Sunoco jumped 21%, reflecting the large premium being offered. Microsoft announced that it would take a 17.6 percent stake in Barnes & Noble’s ‘Nook’ for $300 million. They are looking to capitalise on the rapid growth of the physical tablet business. The software giant was relatively unchanged as the book seller soared 52%. Hologic, the medical equipment maker, absorbed Gen-Probe in a $3.72 billion move. This is part of a wider strategy by Hologic to grow its budding diagnostics unit. The buyer was down 10% (on unrelated news of a lawsuit) while the diagnostics firm was boosted 18.7%. Also that day, Terra Firma Capital Partners bought Four Seasons Healthcare, a nursing home operator, for $1.3 billion. The private equity firm believe that, with less debt, the target has the potential to lead the industry. 

The following day, Mitsui and Mitsubishi acquired a 15 percent stake in an Australian natural gas project owned by Woodside Petrolium for $2 billion. This comes as many Japanese energy companies have been looking for alternatives following the shut down of several nuclear plants in the wake of the Fukishima disaster. The seller increased by 3.7% as Misui and Mitsubishi, both large divsersified groups, fell 1.8% and 2.1% respectively. The day also saw two large retail deals. The first came when shoe company Collective Brands was split in two in a $2 billion deal. The Performance & Lifestyle unit being purchased by Wolvereine Worldwide and Payless ShoeSource /Collective Licencing by Blum Capital and Golden Gate, both privite equity firms. The target grew 1.9% while the apparel maker dropped 4.4%. The other came in women's clothing when Charming Shoppes was integrated into its rival, Ascena Retail Group, for $890 million. The success of Ascena's Lane Bryant chain for plus-sized women is likely to have driven the acquisition. The buyer was relatively unchanged as Ascena was knocked 6.9%.

The midweek saw action in pharmaecuticals, as Novartis purchased Fougera Pharmaecuticals for $1.5 billion in cash. This is expected to create the world's largest generic skincare company, with significant synergies in sales and costs. Novartis lost 1.2%. 
On Thursday, China's Bright Foods Group took majority control over Weetabix from Lion Capital for $1 billion. They state-owned firm believe that the British brand has exciting international growth prospects. Also that day, BG Group sold its 60 percent stake in Comgas, a Brazillian gas company, to Cosan for $1.8 billion. The British energy firm are looking to free up cash with which to invest globally. The deal was met with negative sentiment on the markets, with BG and the sugar and ethanol producer down 1.8% and 1% respectively.