Mergers & Acquisitions

Big pharmacy deal confronts past and now present

1 Sep 2011

Wall Street is betting there’s almost no chance trustbusters will approve the $29 bln acquisition of Medco by rival Express Scripts. Though overly pessimistic, two nixed healthcare mergers in the late 1990s and the challenge to AT&T’s deal provide good reason for skepticism.

Deutsche Telekom may be stuck with U.S. mobile

1 Sep 2011

It’s hard to see attractive alternative M&A options if the $39 bln sale of T-Mobile USA to AT&T falls through. DT may have to live with the business. But for CEO René Obermann it’s not a killer blow. He has the protection of a $6 bln breakup package and a good track record.

Obama’s watchdogs call AT&T’s $39 bln wager

31 Aug 2011

The No. 2 U.S. mobile company bet it could persuade regulators that buying No. 4 T-Mobile would benefit consumers. The U.S. DOJ senses a weak hand. With the industry a near duopoly, the government’s read looks right. AT&T isn’t folding but looks on the verge of a bad beat.

Exxon’s Russian coup rubs salt in BP’s wounds

31 Aug 2011

The U.S. oil group’s Arctic exploration agreement with Rosneft mimics BP’s aborted deal but without the $16 bln share swap. Instead, there’s Russian access to U.S. drilling projects. Assuming no hidden snags, Exxon could become the big winner from BP’s botched Russian strategy.

Spin-off trend isn’t just for investment bankers

31 Aug 2011

Companies from HP to Kraft to Conoco are splitting up. It’s tempting to think only Wall Street’s advisory ranks, who helped create these conglomerates in the first place, really benefit from such fads. But a few examples - Marathon Oil and Motorola - suggest investors can, too.

Vodafone’s Greek tie-up tests mobile M&A limits

31 Aug 2011

Vodafone is proposing a small Greek wedding. The resulting mobile-market duopoly might be hard for Europe’s competition police to swallow, even given Greece’s exceptional problems. But consolidation means big savings. A go-ahead for Vodafone here could spur larger European deals.

China’s new M&A rules may hurt its Internet stars

31 Aug 2011

A freshened regulatory framework adds clarity to the way China treats stock listings and takeovers. But mainland Internet firms which raise money overseas may have to change if they want to be listed at home, or even to secure their domestic operating licenses.

Greek bank M&A shows no mercy on weaker partners

31 Aug 2011

Eurobank EFG is giving less troubled Alpha the lion’s share of the value created by their planned union. The deal leaves Piraeus, the smallest of Greece’s top banks, needing a partner. NBG is the obvious candidate. But Piraeus may, like Eurobank, have to take asymmetric terms.

Qatari Greek bank bailout looks like strategic bet

31 Aug 2011

The 500 mln euro investment by little-known Qatari investment vehicle, Paramount, supporting the merger of Alpha and EFG is opportune. But the emirate might also expect to extract strategic dividends from its support of euro zone troubled banks.  

Peabody’s $5 bln Aussie buy now looks a stretch

30 Aug 2011

Macarthur has finally succumbed to its U.S. rival and ArcelorMittal. More than a year on, Peabody has its target’s precious steel-making coal and Asian access in its grasp. But in the interim, the global growth outlook has dimmed. Demand will have to hold up to justify the price.

CCB sale underlines BofA’s slow road to recovery

30 Aug 2011

Offloading some $8 bln of the Chinese bank’s shares is a double boost to capital. Along with Buffett’s investment and future earnings, it should help put BofA back on track. But none offers a quick fix. Economic and mortgage woes will leave shareholders dangling for some time.

Temasek’s smart CCB trade may have strategic costs

30 Aug 2011

Singapore’s state investment fund is buying shares in China Construction Bank from Bank of America - at a valuation 21 pct below where it dumped the stock last month. That has financial logic. But it may look too clever for Beijing, and hurt Temasek’s access to deals in China.

Greek bank consolidation escapes Catch-22

29 Aug 2011

Cost-cutting mergers between Greek lenders are essential. Trouble is, they double exposure to sovereign debt. Alpha and EFG may have solved the problem by raising 500 mln euros from Qatar. Combining M&A with new private capital makes sense, but other deals may not come so easily.

Buffett’s $5 bln endorsement won’t end BofA’s woes

26 Aug 2011

Winning the Sage of Omaha’s backing is a coup for CEO Brian Moynihan - and the terms aren’t painful. But the deal offers no fix to BofA’s mortgage black hole nor does it immediately boost common capital. Those concerns may prove to be more enduring than Buffett’s thumbs up.

Bloomberg LP spares no expense on first big deal

25 Aug 2011

The New York mayor’s financial information company is paying $1 bln for legal publisher BNA. At 36 times earnings, no public company could reasonably compete. But the price also reflects Bloomberg’s ardor to expand its influence and build a cushion against Wall Street.

Abu Dhabi’s Aabar sticks out for the wrong reasons

25 Aug 2011

The state-owned investor has carried on spending as others have been told to cut back. But multi-billion dollar bets on Glencore and Malaysia’s RHB are under water. Aabar’s turn of fortune underscores the fund’s lack of a focused strategy.

Private equity yellow-bellies make sorry return

23 Aug 2011

Cerberus and a partner reneged on an agreed buyout of hotelier Innkeepers, citing a material adverse change after markets burped. It may be just a wimpy negotiating ploy. But investors got burnt by similar tactics in the crisis. This is a good reminder to remain wary.

Foster’s comeback to SAB bid just a sharpener

23 Aug 2011

The Aussie brewer promised shareholders an A$500 million payout. That was enough to nudge its shares past SAB’s hostile offer, but is less than it can afford. With SAB yet to make a formal bid, Foster’s has left itself plenty of room for something stronger later.

HP stock sell-off looks like overkill

19 Aug 2011

The tech giant has seen about a quarter of its market value, almost $16 bln, vaporized in two days. Shareholders have fled following another profit warning, a huge and pricey acquisition deal, and a strategic U-turn. That makes for plenty of warts - but HP now looks too cheap.

Rivals unlikely to crash HP’s punchy Autonomy deal

19 Aug 2011

Autonomy would be a nice-to-have for Oracle or IBM. But Hewlett-Packard’s $11.7 bln offer for the UK software group is already rich, and rivals don’t need Autonomy quite so badly. Add in falling markets and the ugly reaction of HP shares, and a bidding war doesn’t compute.