The number of North American deals grew last week — to 52 from 44 — but the volume of transactions plunged, as multibillion-dollar deals nearly vanished from the books. And with strategic dealmaking hobbled, the leading purchases were among related companies or by private equity players.
The largest transaction was Nationwide Mutual Insurance’s $2.41-billion offer for the insurance holding company Nationwide Financial Services, while the only other deal worth $1 billion was the purchase by private equity companies Carlyle Group LLC and Riverstone Holdings LLC of Canada’s Gibson Energy from London-based Hunting plc. Sony Corp. of America’s purchase of a half-stake in Sony BMG Music Entertainment from Bertelsmann AG for $900 million did come close, however.
The $7.05 billion in deal volume marked a sharp fall-off from the prior week’s nearly $20-billion, according to data on the top 10 North American transactions provided to CFO.com by mergermarket.
Year-to-date deal value is now $622.84 billion, based on 2,334 transactions through Aug. 10. That’s down from $1.23 trillion based on 3,239 transactions.
Nationwide Mutual Insurance to buy Nationwide Financial Services for $2.41 billion
Nationwide Financial definitively agreed to be acquired by Nationwide Mutual, with both boards approving the deal at $52.25 per Class A share, a premium of 38 percent. Both companies are based in Columbus, Ohio, with Nationwide Financial being the holding company for life insurance and other firms comprising the domestic life insurance and retirement savings operations of the Nationwide group. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Lazard
Bidder financial advisor: UBS; Goldman Sachs
Seller legal advisor: Dewey & LeBoeuf; Sidley Austin
Bidder legal advisor: Jones Day; (Skadden Arps Slate Meagher & Flom advising UBS, Goldman Sachs)
Riverstone Holdings LLC and The Carlyle Group LLC to buy Gibson Energy Ltd from Hunting plc for $1.07 billion
Washington, D.C. and New York City-based private equity firms Riverstone Holdings and Carlyle Group LLC agreed to acquire Calgary, Alberta-based Gibson Energy from London-based Hunting plc. The price exclude a working capital payment of $165.06 million. The acquisition, financed by UBS will be voted on by Hunting’s shareholders approval on Aug. 26.
Seller financial advisor: Close Brothers; ABN AMRO; Simmons & Company International
Bidder financial advisor: Not available
Seller legal advisor: CMS Cameron McKenna
Bidder legal advisor: Not available
Sony Corp. of America to buy a 50 percent stake in Sony BMG Music Entertainment from Bertelsmann AG for $900 million
Tokyo-based Sony, the media and electronics company, agreed to acquire the 50 percent of New York City-based Sony BMG Music Entertainment that it doesn’t own. Seller Bertelsmann is a Guetersloh, Germany-based publishing and broadcasting company.
Seller financial advisor: JPMorgan
Bidder financial advisor: Citigroup
Seller legal advisor: Davis Polk & Wardwell
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton; Paul Weiss Rifkind Wharton & Garrison
General Maritime Corp. to buy Arlington Tankers for $494 million
Arlington Tankers, based in Hamilton, Bermuda, definitively agreed to be acquired by General Maritime, a Marshall Islands-based company with New York City headquarters, engaged in providing international seaborne crude oil transportation services. Terms call for one share of the new combined company to be exchanged for each Arlington share, with 1.34 shares of the new company being exchanged for each General Martime share, representing $18.07 for each Arlington share, a discount of 8.3 percent. The implied equity value is about. $280 million excluding assumed debt. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Jefferies & Company
Bidder financial advisor: UBS
Seller legal advisor: Wilmer Cutler Pickering Hale and Dorr
Bidder legal advisor: Kramer Levin Naftalis & Frankel; Covington & Burlington
Tower Group to buy CastlePoint Holdings for $485 million
CastlePoint Holdings, also of Hamilton, Bermuda, definitively agreed to be acquired by New York City-based Tower Group, which provides property and casualty insurance products and deals in reinsurance. CastlePoint is a property and casualty insurer with a reinsurance business. Terms call for 0.47-share of Tower and $1.83 in cash to be exchanged for each CastlePoint share, for a per-share value of $12.68, a premium of 42.8 percent.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Lazard
Seller legal advisor: Sullivan & Cromwell
Bidder legal advisor: Debevoise & Plimpton
Petroleo Brasileiro SA to buy the fuels business of Esso Chile Petrolera , a 33.3-percent stake in Sociedad de Inversiones de Aviacion Ltd., and a 22-percent stake in Sociedad Nacional de Oleoductos from ExxonMobil Corp. for $400 million
Rio de Janeiro-based energy company Petroleo Brasileiro agreed to acquire the fuels business in the retail, industrial, and aviation markets of Esso Chile Petrolera, along with associated Chilean companies, from Irving, Texas-based ExxonMobil. The transaction is expected to be completed in next year’s second quarter.
Seller financial advisor: JPMorgan
Bidder financial advisor: Not available
Seller legal advisor: Not available
Bidder legal advisor: Not available
Meda AB to buy businesses in Eastern and Western Europe from Valeant Pharmaceuticals International for $392 million
Solna, Sweden-based pharmaceutical company Meda agreed to acquire the businesses of Valeant, an Aliso Viejo, Calif.-based specialty pharmaceutical company for cash in a deal expected to be earnings-per-share accretive next year. The transaction is expected to close in the third quarter.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Not available
Seller legal advisor: Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Not available
IGM Financial to buy Saxon Financial Inc. for $250 million
Winnipeg, Manitoba-based financial services company IGM agreed to acquire Toronto-based Saxon for cash. Terms call for a $20.43-a-share price N based mutual fund company, for a cash consideration of CAD 286m ($278m). Under the terms of the agreement, IGM is offering CAD 21.00 ($20.43) per share in a cash tender offer, which values the entire equity at $278 or $250m including assumed cash. The offer represents a premium of 68 percent over Saxon’s closing share price of CAD 12.50 ($12.26) per share as on 04 July 2008, one month prior to announcement of the deal. This acquisition will add CAD 13.4 billion ($12 billion) of total assets under management to IGM’s CAD 117 billion (114 billion). This is expected to close on 30 September 2008.
Seller financial advisor: BMO Capital Markets
Bidder financial advisor: Internal
Seller legal advisor: Torys
Bidder legal advisor: Blake, Cassels & Graydon
Total SA to buy Synenco Energy Inc. for $248 million
Total E&P Canada Ltd., a wholly owned subsidiary of Paris-based Total, agreed with Synenco for Total to pay cash for the outstanding common of Calgary, Ontario-based Synenco on a fully diluted basis. Directors of both companies approved the merger at $8.88 a share, a premium of 16 percent. The value, including assumed cash, is $522 million.
Seller financial advisor: Merrill Lynch; TD Securities
Bidder financial advisor: CIBC World Markets
Seller legal advisor: Borden Ladner Gervais; Bennett Jones
Bidder legal advisor: Sullivan & Cromwell; Macleod Dixon
Humana Inc. to buy PHP Companies Inc. from Covenant Health for $245 million
Louisville, Ky.-based health and supplemental benefits companies Humana agreed to pay cash for Knoxville, Tenn.-based PHP, a health insurance services provider. The seller is Covenant Health of Knoxville. The transaction is expected to be complete in the fourth quarter.
Seller financial advisor: Citigroup
Bidder financial advisor: Banc of America Securities
Seller legal advisor: Not available
Bidder legal advisor: Not available
source: mergermarket