M&A Roundup

Nasdaq Stock Market and London Stock Exchange; Mittal and Arcelor; UBS and Banco Pactual; Merck and GlycoFi; Wachovia and Golden West Financial; Th...
Helen ShawMay 11, 2006

• The Nasdaq Stock Market has paid $321 million for an additional 5 percent of London Stock Exchange shares, bringing its stake to 24 percent. The move is Nasdaq’s third separate purchase of LSE shares since March, when Nasdaq’s $4.2 billion offer for the entire exchange was rebuffed.

• Mittal Steel, the world’s largest steel company, announced that it plans to present its $27 billion bid for its rival Arcelor directly to shareholders. Arcelor has stated that it will not enter talks on Mittal’s bid unless the bid is all-cash or includes a full business plan. Meanwhile, the European Commission has extended its inquiry into the hostile bid until June 7. In addition, Arcelor has sued Mittal over patent infringement; Arcelor has stated that the lawsuit is unrelated to the takeover attempt.

• Swiss-based UBS has agreed to acquire Brazilian investment bank Banco Pactual for up to $2.5 billion. The total price includes a $1 billion payment up front and as much as $1.6 billion in five years, contingent on performance. UBS will also create a pool of up to 500 million shares payable to employees five years after the deal is finalized. Pending regulatory approval, the deal is expected to close in the third quarter.

• Merck has agreed to purchase GlycoFi, a privately held biotechnology company with about 55 employees, whose proprietary protein-optimization technology might be used to develop new drugs. The all-cash deal, valued at approximately $400 million, is expected to close in the second quarter.

• Wachovia has agreed to acquire Golden West Financial, one of the last major independent banks on the West Coast, for $25.5 billion in cash and stock. The combined company will have $669 billion in assets and a $117 billion market capitalization. The deal is expected to close in the fourth quarter.

• Thermo Electron has agreed to purchase Fisher Scientific International for $10.6 billion in stock; Thermo will also assume $2.2 billion of Fisher’s debt. The merger would create the largest global provider of research supplies and instruments, with more than $9 billion in annual revenue and 30,000 employees. The deal is expected to close in the fourth quarter.

• Teck Cominco has offered a $16 billion unsolicited bid for Inco, the world’s second-largest nickel producer. The offer is contingent upon Inco’s withdrawal of its takeover bid for Falconbridge, another Canadian mining company.