M&A Roundup

Goldcorp and Glamis Gold; Russian Aluminum and Sual Group and Glencore International; Alcatel and Lucent; Inco and Phelps Dodge and CVRD; Kinder Mo...
Helen ShawAugust 31, 2006

•Goldcorp, the third-largest gold producer in Canada, has agreed to acquire its American rival, Glamis Gold, for approximately $8.6 billion. Goldcorp’s shareholders will own about 60 percent of the combined company. The companies expect to close the deal by November.

•OAO Russian Aluminum, its rival OAO Sual Group, and Swiss company Glencore International’s alumina assets will merge to form the world’s largest aluminum maker in terms of tons of aluminum. Alcoa will continue to be the largest aluminum producer by sales. Russian president Vladimir Putin has approved the planned merger.

•A French investment advisory firm, Proxinvest, has recommended that Alcatel shareholders vote in opposition to the planned $13.4 billion merger between telecom equipment makers Lucent and Alcatel at the companies’ September 7 meeting. The advisory firm believes the price for Lucent is too high, given Lucent’s profit warning, and it has concerns about Lucent’s pension and healthcare liabilities.

•Canadian nickel producer Inco has recommended its shareholders to accept a friendly $17.5 billion takeover bid by Phelps Dodge. The merger would create North America’s largest mining company. Inco had recently welcomed talks with its Brazilian rival Cia. Vale do Rio Doce after it launched a hostile $17.7 billion cash bid. After CVRD made its cash bid, Canadian zinc producer Teck Cominco had abandoned its $17.83 billion cash and stock bid for Inco.

•Oil and gas pipeline operator Kinder Morgan has agreed to an improved $15 billion takeover bid from co-founder and chairman Richard Kinder and investors to take the company private. The investors, American International Group, Goldman Sachs Group, Carlyle Group, and Riverstone Holdings, will also assume $7 billion in debt, making the deal’s value $22 billion, the largest pipeline acquisition ever. The group originally bid $100 a share in May; the sweetened bid is $107.50 a share.

•Unilever has agreed to sell most of its European frozen-foods unit to Permira Funds for $2.21 billion. The unit includes the Iglo and Birds Eye brands. Buyout firm Permira Funds trumped CapVest and Young’s Bluecrest Seafood in the bidding.

•Western Refining has agreed to buy Giant Industries for approximately $1.2 billion in cash and assume $275 million of debt. Giant Industries owns an oil pipeline and distribution system that services New Mexico, Arizona, and Colorado.

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