Friday, 6 July 2012

Mergers & Acquisitions - Week Ending 07/06/12


Over the weekend, Linde purchased Lincare Holdings, a provider of respertory systems for homes, for $3.8 billion. The buyer believes that the deal will strengthen their healthcare unit and their presence in the US. The gas products firm gained 1.6% as the target jumped 22%, reflecting the large premium offered. A hectic Monday began with the news that Micron Technology would buy bankrupt rival Elpida Memory for $2.5 billion. The memory specialist sees this as an opportunity to expand its manufacturing base in Asia at a low cost. They were up 3.8%. The tech trend continued as Dell took over Quest Software for $2.4 billion. This is the latest step by the PC manufacturer towards the higher margin software business. Dell lost 1% while the enterprise software group was relatively unchanged. GE Capital sold its business property lending unit to EverBank Financial for $2.51 billion. This comes as General Electric’s financial arm looks to bolster its balance sheet in the wake of the economic crisis. EverBank, a NYSE newcomer, grew by 4.4% as the vendor’s parent fell 1.7%. 

CEB absorbed SHL, which provides talent analytics, for $660 million in an all-cash deal. The bidder is hoping that SHL’s cloud-based technologies can help its advisory business in its global strategy. CEB increased by 1.9%. Also that day, electronic payments firm Cielo bought rival Merchant e-Solutions for $670 million. This is expected to allow Cielo to widen its span of Brazillian influence from retail to online. They gained 2.4%. The week’s two remaining deals came on Thursday, when Volkswagen purchased the half of Porsche that it didn’t own for $5.58 billion. This news, which ironically started with Porsche trying to absorb the buyer, has been two years in the making; with negotiations yielding little results until recently. The markets sided with Volkswagen; the auto giant was boosted 6.2% while the target decreased 5.9%. Also that day, Walgreen announced its takeover of a pool of US drugstores for $438 million. This is the latest in a string of acquisitions, both national and international, by the pharmacy powerhouse. They were up 0.9%.