M&A Roundup

Ford Motor Co.; ADP; Kohlberg Kravis Roberts, Silver Lake Partners and Philips Electronics; Verizon and Vodafone; Phelps Dodge, Inco, Falconbridge ...
Helen ShawAugust 3, 2006

•Ford Motor Co. has hired investment banker Kenneth Leet to explore asset sales and alliances with other auto makers. The Jaguar brand and Ford’s credit arm will be the first aspects of the business to be reviewed.

•Automatic Data Processing plans to spin off its brokerage-services unit to shareholders, creating an independent company with an approximately $3 billion stock-market value. Chief executive officer Art Weinbach, who will retire from ADP on August 31, will be chairman of the new company. The spinoff, which is subject to regulatory approval, would be completed by early 2007.

•A private equity consortium including Kohlberg Kravis Roberts and Silver Lake Partners have won the auction for a semiconductor division of Philips Electronics for approximately $10.25 billion. Two other buyout groups that vied for the unit were Apax Partners Worldwide, Bain Capital and Francisco Partners as one team and the Blackstone Group, Texas Pacific Group and Permira Advisors as another group.

•Vodafone Group, a joint venture partner with Verizon Communications in Verizon Wireless, will not sell its 45 percent stake in Verizon Wireless, which is valued to be at least $40 billion. Additionally, Verizon chief executive officer Ivan Seidenberg said it is likely that Verizon would spin off its print and online phone directories business to shareholders.

• The friendly, proposed Phelps Dodge-Inco-Falconbridge merger was an attempt to thwart Switzerland-based Xstrata’s hostile bid for Canadian mining company Falconbridge, but Inco has ceded Falconbridge to Xstrata. Phelps Dodge stands behind its bid for Inco and is reviewing strategies to acquire the nickel mining company. Teck Cominco has boosted its hostile $16.9 billion offer for Inco, Canada’s top nickel producer, by $2.7 billion in cash.

•Norway’s largest phone company, Telenor, has won the auction for Mobi 63, a Serbian mobile phone operator, for $1.93 billion. Other bidders included Telekon Austria and Orascom Telecom Holding of Egypt. Mobi 63 had been owned by Serbia’s government and a group of Austrian investors. Telenor will gain over two million wireless customers through the deal.

•Comcast and Time Warner have completed their acquisition of assets from bankrupt cable operator Adelphia. The acquiring companies will pay $12.5 billion in cash and Time Warner Cable stock representing about 16 percent of equity in Time Warner Cable; Time Warner has declined to state the value of that equity stake. Time Warner will spin off the Time Warner Cable stake in an initial public offering. As part of the deal, in the next three months, Adelphia must sell at least one-third of the Time Warner Cable common stock it received.

•SanDisk, the largest producer of memory cards in consumer electronics, has agreed to purchase M-Systems Flash Disk Pioneers for $1.3 billion in stock. SanDisk will assume about $75 million of M-Systems’ debt. Israel-based M-Systems, which has restated its results going back to 2001, has been involved in a stock-options investigation. The deal is expected to be completed in the fourth quarter of 2006.