Friday, 29 June 2012

Mergers & Acquisitions - Week Ending 06/29/12


On Monday, Linn Energy purchased 12,500 acres of gas rich Wyoming property from BP for $1 billion. In the wake of the Gulf oil spill, the energy giant decided to pursue asset spin offs to raise funds; this is its second sale this year. The deal was met negatively by the market; with the seller and Linn falling 1.9% and 2.3% respectively. Also that day, Microsoft acquired Yammer, an enterprise social network, for $1.2 billion. This comes as the world’s largest tech firm looks to bolster its enterprise software offerings. The buyer lost 2.7%. The following day, SBA Communications bought over 3000 towers from TowerCo for $1.45 billion. The bidder believes that this investment will pay off when projected growth in telecoms fuels further cell-splitting by carriers. The tower operator was up 2.7%. The midweek saw The Tile Shop complete a $500 million merger with blank cheque firm JWC Acquisitions as it looks to go public. Through JWC the high end tiling retailer will now trade on the NASDAQ under the symbol TTS as it looks to finance further growth.

On Thursday, Petronas absorbed Progress Energy Resources for $5.35 billion. Foreign companies have been looking to invest in the North American energy boom, and many believe that Asian firms like Petronas are best positioned to gain from it due to their impressive extraction technologies. The target increased by 0.2%. The following day, brewer Anheuser-Busch InBev bought the 50 percent of rival Grupo Modelo that it doesn’t own. The $20.1 billion move is expected to help further the Mexican firm’s footprint in other countries while increasing the presence of Anheuser’s beers in Latin America. The buyer jumped 7.4% as Modelo closed almost 3% higher. Melrose took over the Elster Group for $2.3 billion. The British firm, which specializes in manufacturing turnarounds, is hoping that the utility meter producer will see performance increases under its cost-cutting regime. Elster and Melrose gained 3% and 2% respectively. Later on that day there was action in pharmaceuticals as Bristol Myers Squibb teamed up with AstraZeneca to purchase Amylin Pharmaceuticals for $7 billion. The main driver behind the deal is the Amylin's budding diabetes drug; adding new treatments to product lines has become important for medical giants as patents run out. The following Monday, Bristol Myers and AstraZeneca gained 0.3% and 2.1% respectively. The target was boosted 8.8%.