Mergers & Acquisitions - Week Ending 05/25/12

Over the weekend, it was announced that the Alibaba Group would buy $7.1 billion of its own stock back from Yahoo, equating to around half of Yahoo’s 40 percent stake in the Chinese website. It is believed that the struggling internet firm will use the money to buy back stock in an attempt to improve its dwindling price. The seller gained 1% on Monday. Setting the pace for what was a hectic day deal-wise, DaVita purchased HealthCare Partners, a firm which runs several medical groups, for $4.4 billion. This move is part of DaVita’s plan to expand westward and into parts of Florida. The dialysis clinics operator jumped 5% on the news. The Dalian Wanda Group of China acquired AMC Entertainment for $2.6 billion. This deal will create the world’s largest theatre operator, and many believe it will strengthen Chinese influence on American film. The Chinese real estate giant already had large interests in the entertainment industry. It was announced that Barclays would sell its $6.1 billion stake in BlackRock, with as much as $1 billion of that being bought back by the investment manager. This comes amid talk that banks won’t be able to maintain such risky investments when the new Basel III regulations take effect. The British bank was up 3.8%, as BlackRock lost 2.4%. Power management firm Eaton Corporation absorbed Cooper Industries for $11.8 billion. By adding electrical equipment to its product line, the buyer believes that it can create a global electricity group. The power management firm dropped 0.7%, as Cooper soared over 25%, mirroring the premium being offered.

The following day, Accor sold its American hotel unit to Blackstone Group for $1.9 billion. The spin off comes as the French hotel chain looks to focus on emerging economies and Europe. This deal was met positively on the markets; with the vendor and the private equity firm gaining 5.8% and 2.5% respectively. Also that day, SAP took over rival Ariba for $4.5 billion. They become the latest firm to invest in the cloud market, with the enterprise software giant expecting the industry to “redefine network innovation”. The bidder was relatively unchanged, while Ariba spiked almost 20%. The midweek saw PTT Exploration and Production beat Shell at the post to acquire Cove Energy for $1.91 billion. The backdrop of this battle is the promise of East African gas finds for which the target is heavily involved. Cove was boosted over 11%. Surprisingly, the snubbed Dutch company was elevated 0.8% as the state-owned Thai energy group lost 2%. Also that day, Seagate bought a majority stake in rival LaCie for $186 million. The French group will add a premium edge to Seagate’s mass-driven offerings. The buyer fell 4.2%, while LaCie was 1.8% higher by closing. On Thursday, Global Blue was procured by Silver Lake, a private equity firm and Partners Group, an investment management company. The tax-free shopping outfit was chosen as a way to profit from the growing luxury travel market. Also that day, Lehman Holdings purchased the remainder of real estate group Archstone for $1.58 billion. The group, which owns many apartment developments, is expected to aide the downtrodden financial firm in repaying creditors.