Mergers & Acquisitions

Aegis finds a Japanese sugar daddy – finally

12 Jul 2012

The UK media buyer and major shareholder Vincent Bollore have accepted a 3.2 bln stg cash bid from Japan’s Dentsu. It’s a happy ending for the perennial takeover target. But given negligible cost savings, the 45 pct premium is chunky. To stack up, execution must be near-perfect.

Comcast deal extends content’s precarious reign

11 Jul 2012

Feuds between U.S. TV program creators and distributors are as ugly as the one in “Hatfields & McCoys.” So the $19 bln valuation implied by Comcast’s sale of a stake in the hit show’s parent company A&E is impressive. But fee fights like DirecTV and Viacom’s are the future.

Intel deal closes circuit to faster chips, growth

10 Jul 2012

Next-generation chips are cheaper, quicker and use less power. But toolmakers have been unwilling or unable to spend the sums needed to make the switch. Intel’s $4.1 bln ASML investment deploys offshore cash to remove such bottlenecks and forces rivals to play to its strengths.

Bankrupt Hawker may not be so easily hawked

10 Jul 2012

A Chinese bidder for the jet maker is offering a heroic price, and could save thousands of U.S. jobs. But Chinese state backing could be a sticking point. All hinges not just on the foreign investment regulator, but whether a bankruptcy court thinks the deal can fly politically.

What’s next on Carlos Brito’s shopping list?

9 Jul 2012

AB InBev will need some time to digest its purchase of Mexico’s Modelo and pay down debt. At that point it’s hard to believe the hyper-acquisitive CEO will be finished. Yet with few independent brewers of any size left, his next deal may be a whopper like SABMiller or even Pepsi.

Supreme Court gives shot in arm to Obamacare M&A

9 Jul 2012

Expanding health coverage to 32 mln Americans remains politically contentious. But it’s here to stay and a lucrative opportunity for insurers that helps justify juicy merger premiums. That’s the logic behind WellPoint’s pricey $4.5 bln bet on Amerigroup. More deals are likely.

Duke CEO sucker punch a value lesson for investors

6 Jul 2012

Electricity firm Progress demanded, and got, the top job when it agreed to sell to its larger rival. In return the firm accepted a tiny premium. That Bill Johnson lasted only hours in the post is a reminder to shareholders not to sacrifice value for the prestige of leadership.

Private equity earns slick return from oil data

4 Jul 2012

The global race for natural resources has yielded a rich seam of profits for Wood Mackenzie, a PE-backed specialist in energy data. Owner Charterhouse will recoup three times its money through a $1.7 bln sale. Paying a full price in 2009 was bold, but the risk has been rewarded.

Qatar evolves into active not activist investor

3 Jul 2012

The Gulf state has sent a message with its Glencore-Xstrata intervention: it won’t shy from demanding value when shareholders are put on the spot. But for all the noise, Qatar probably isn’t ready to become a genuine activist targeting underperforming companies in need of a kick.

How does a $670 mln deal spark a $400 bln battle?

2 Jul 2012

When Brazil’s largest credit card processor goes on the hunt. Cielo is buying U.S. e-commerce shop Merchant e-Solutions hoping to defend its lead in a highly competitive market. With industry profits expected to fall, Cielo, Redecard and others are all fighting for an edge.

Bristol-Myers and Astra make fat bet on obesity

2 Jul 2012

The U.S. and UK drug giants are teaming up in the $7 bln purchase of Amylin. Seven times estimated sales is a hefty price for a biotech whose main drugs face stiff potential competition. But Amylin’s focus on diabetes, a sadly expanding market, makes this a healthier endeavor.

Upstart EverBank zigs while GE Capital zags

2 Jul 2012

The industrial giant is shedding financial assets and trying to reduce dependence on wholesale funding. The newly public EverBank is taking the opposite tack, spending almost double its $1.3 bln market cap on GE’s Business Property unit, leaving it with more loans than deposits.

Gas giant Linde expands to fill healthy space

2 Jul 2012

The German company will pay $4.6 billion including debt for Lincare, a specialist in respiratory gases. That is a full-looking 9.3 times EBITDA and synergies will be limited. But Linde boosts its U.S. footprint - and secures a route to growth outside its consolidated core market.

Carlos Brito pays through the nose for Modelo

29 Jun 2012

The Bud boss is drawing a cool $20 bln from the keg to acquire the half of the Mexican brewer he doesn’t already own. To make that work Brito is going to need to brew up more than the $600 mln of synergies he is promising. History suggests that is possible - but it’s a stretch.

Best Buy management buyout would be hard to swing

27 Jun 2012

The U.S. electronics retailer’s founder is mulling a takeover. Despite his 20 pct stake and the near $7 bln company’s prodigious cash flow, there are roadblocks to a leveraged deal. The firm can’t take on much more debt. And electronics retailing is a dying dog of a business.

Xstrata pay compromise saves face but little else

27 Jun 2012

Mick Davis’s tweaked “retention” package may be enough of a sop to put pay on the back burner as the miner tries to save its Glencore merger. But it makes a muddle of incentives. Tying awards to previously unseen cost-cutting potential poses dangers. It’s still a poor scheme.

Glencore-Xstrata deal looks hard to rescue

27 Jun 2012

Qatar’s call for much sweeter merger terms is a big obstacle. Xstrata’s 10 pct shareholder can’t easily retreat from its public demand. And Glencore can’t justify a sizeable raise to its own investors. If the Qataris hold firm, the deal may have to be parked for another day.

Glenstrata wobble another blow for M&A bankers

27 Jun 2012

Global deal-making is already down a quarter on 2011. Now the year’s biggest tie-up, Glencore-Xstrata, is in doubt. Nine banks advising on mining’s most obvious merger always looked rich. In a slow year, they can ill afford to lose $130 million of fees.

AB InBev can pay top dollar to gulp down Modelo

25 Jun 2012

The brewing giant is considering buying the rest of the Mexican beer maker it doesn’t own. That would give it another leg up over regional rival Heineken and let CEO Carlos Brito cut costs. Just matching Modelo’s operating margin to its own would justify a $15 bln price tag.

Icahn may owe Goldman, but the reverse is true too

21 Jun 2012

The banking titan is suing CVR Energy, an oil refiner the uppity billionaire just bought. Goldman defended CVR and alleges Icahn blocked payment of $18.5 mln of fees. Theirs is a classic Wall Street rivalry. Maybe Icahn reckons Goldman has made enough off his activism already.