Mergers & Acquisitions

German double bill could make sense for Vodafone

4 Jun 2013

The UK-based mobile group is said to be eyeing Kabel Deutschland again, for a 10 bln euro-plus takeover. Buying the German cable-TV provider might bolster Vodafone more than a recent broadband alliance with Deutsche Telekom. It is a shame the target is so expensive.

GM Building’s $3.4 bln price tag is sign of times

3 Jun 2013

A 40 pct stake in the Apple Store-tenanted Manhattan landmark has set a new record, with a value a fifth above a 2008 transaction. A Chinese property billionaire and Brazilian bankers are the buyers. But the building has a cursed history – not just for the carmaker that built it.

Severn Trent buyout treads water

3 Jun 2013

The UK utility rejected a raised proposal with a 5.2 bln stg equity value. Borealis’ bid consortium sounds upset. But the limited market reaction, and the measured tone from Severn, suggests the bidders are not too far off a recommendable offer.

Agnellis brace for Fiat-Chrysler merger endgame

3 Jun 2013

The Agnellis want to maintain their 30 percent stake in Fiat after the Italian carmaker has merged with Chrysler. The 2 bln euro sale of their stake in Swiss inspection group SGS gives them ample means to take part in a potential capital hike after the deal.

Smiths medical sale would create a fresh headache

31 May 2013

The UK conglomerate is in talks to sell one of its biggest units. A fully priced deal would highlight the turnaround under CEO Philip Bowman. But he needs a good plan for the more than 2 billion pounds in proceeds. That will probably include a mixture of pensions funding and M&A.

Buffett needs luck for Las Vegas gamble to pay off

30 May 2013

Berkshire Hathaway’s $5.6 bln bet on NV Energy suggests billionaire investor Warren Buffett is coming up short on decent ways to deploy his cash. With utility mergers offering meager synergies thanks to regulators, Berkshire will struggle to cover its cost of capital.

Double arbitrage validates China’s pork purchase

30 May 2013

Why is Shuanghui paying $4.7 billion for U.S. producer Smithfield? Simple: imported pork is cheaper than the Chinese-reared variety, and shoppers will pay up to avoid suspect local produce. With luck, the deal will spark a change in the factors that make it so attractive.

Grim reaper breathes life into moribund M&A market

29 May 2013

The 9 pct decline in worldwide merger volume may be haunting Wall Street. But U.S. funeral operator Service Corp is buying a rival for $1.4 bln, with the value of synergies more than covering the premium paid. CEOs and shareholders are at peace with deals of this kind.

Clean pork powers $4.7 bln China-U.S. meat deal

29 May 2013

Fluorescent pork headlined one PRC food scare. Shuanghui’s planned purchase of Smithfield could help prevent such debacles. For one thing, untainted pigs are cheaper to produce in the U.S. and import to China. As long as the trade goes that way, U.S. watchdogs needn’t worry.

ENRC board has reputation leverage

29 May 2013

Kazakhmys, ENRC’s 26 pct owner, may be less fussed than other minority shareholders about getting a high price out of the miner’s founding oligarchs. But Kazakhmys won’t necessarily embrace a low offer that ENRC’s independent board has snubbed. Reputational cover is valuable.

Valeant shows how some M&A favors the brave

28 May 2013

The $8.7 bln Bausch & Lomb deal is the biggest yet for the acquisitive pharmaceuticals group, but it comes with cost savings worth at least $5.6 bln. Investors added about as much to Valeant’s market value, giving it firepower to seek new targets. CEOs elsewhere should take note.

Security is diversion in $20 bln-plus Sprint fight

23 May 2013

SoftBank and Dish Network have pulled out the stops in their battle to control the U.S. cellphone operator. But SoftBank has the edge. The claim that Japanese ownership of Sprint is a risk to national security is half-baked and shows Dish boss Charlie Ergen’s desperation.

Apax buyout tailored to avoid J Crew lapses

23 May 2013

A $1.1 bln deal to take rue21 private is rife with conflicts. An Apax-affiliated fund owns 30 pct of the U.S. teen clothier while two Apax partners also sit on the rue21 board. But safeguards put in place suggest the lessons from TPG’s raggedy purchase of J Crew have stuck.

Temasek’s Indonesian bank bid still stuck in limbo

22 May 2013

DBS can buy 40 percent of local lender Danamon, says Indonesia’s central bank, but no more. That’s of little use to the Singaporean bank, which is seeking control, or to the sovereign wealth fund which has stakes in both groups. Only political intervention can break the deadlock.

Marissa Mayer puts exclamation point back in Yahoo

20 May 2013

Her $1.1 bln deal to buy blogging site Tumblr bolsters the website’s firepower in the mobile arms race. It’s the latest sign that Mayer has confidence from her board and shareholders to take risks. In less than a year, she has turned Yahoo from a purple joke to part of the buzz.

"Balance of shame" holds key to ENRC fate

20 May 2013

An independent board committee has rightly rejected a lowball bid for the miner from its three founding oligarchs and the Kazakh government. Whether a higher price can be extracted depends less on ENRC’s prospects than on how much the bidders are willing to pay to save face.

Even losers win from $5 bln Actavis deal

20 May 2013

Investors loved it when the generic drug firm was the subject of buyout talks. Now they’re just as pleased that Actavis is buying smaller Warner Chilcott instead. The sector is so ripe for consolidation that it’s hard to come up with any combination that investors won’t embrace.

Morrisons’ click with Ocado makes M&A less likely

17 May 2013

The UK supermarket has gone for a joint venture with online Ocado rather than a full-blown bid. It will help Morrisons, a web laggard, catch up with rivals. A short squeeze explains most of the Ocado share surge, but the smaller firm has won surprisingly advantageous terms.

Bigger really is better in generic drug mergers

15 May 2013

Pharmaceutical firm Actavis has spurned interest from rivals Valeant and Mylan. Instead, the $16 billion generics manufacturer is pursuing the much smaller Warner Chilcott. That combination won’t deliver the hefty dose of cost savings that could come from a larger deal.

A fresh bid for Betfair? Don’t bet on it

15 May 2013

The gaming group’s shares are still up smartly, even though buyout talks failed. That partly reflects growing belief in Betfair’s turnaround. But any lingering bid speculation is almost certainly misplaced. Private equity is typically loath to bypass management and go hostile.