M&A Roundup

Aer Lingus and Ryanair; Eli Lilly and Icos Corp.; Level 3 Communications and Broadwing; Chicago Mercantile Exchange and Chicago Board of Trade; Wal...
Helen ShawOctober 19, 2006

•The hostile $1.88 billion takeover bid by budget airline Ryanair for Irish airline Aer Lingus has prompted Irish tycoon Denis O’Brien to buy approximately $40 million of Aer Lingus stock to support the recently privatized airline. Aer Lingus has rejected the bid, which Ryanair states it will not increase. The Irish government owns a 43.8 percent stake in Aer Lingus and will not sell its shares.

•Eli Lilly has agreed to buy biotechnology company Icos Corp. for $2.1 billion. Icos produces the drug Cialis, which is expected to exceed $1 billion in sales next year. The deal is expected to close in late 2006 or early 2007.

•Level 3 Communications, a wholesale telecom provider, has agreed to acquire its rival, Broadwing Corp., for $1.4 billion in cash and stock. The deal, which is one of many recent acquisitions by Level 3 this year alone, is another sign of carrier consolidation in the U.S. market.

•The Chicago Mercantile Exchange has agreed to purchase the Chicago Board of Trade for approximately $8 billion. The transaction would create the largest derivatives exchange, which is to be named CME Group Inc. Chicago Merc shareholders will own 69 percent of the new company.

•Wal-Mart Stores has reached an agreement to acquire Trust-Mart, a food and department store chain in China, for about $1 billion. Trust-Mart, a unit of Taiwan’s Chengda Group, had sales of $1.7 billion in 2005. If the deal goes through, Wal-Mart will buy 31 Trust-Mart stores and gradually increase its holdings. The deal is subject to approval by Chinese regulators.

•Banco Popolare di Verona e Novara Scrl has agreed to buy Banca Popolare Italiana Scrl for $10.3 billion. The transaction will create the fifth-largest bank in Italy. Popolare Italiana went on the block after it reported a loss in 2005 and its former chief executive officer was arrested.

•Oshkosh Truck Corp., a producer of military vehicles, has agreed to acquire JLG Industries, a construction-equipment maker, for approximately $3 billion. The deal, which reduces Oshkosh Truck’s dependence on defense expenditures, will create a combined company with $6 billion in annual sales.