M&A Roundup

Citic Group and Nations Energy Corp.; New York Stock Exchange and Euronext; Dewey Ballantine and Orrick, Herrington & Sutcliffe; Jack Welch and Bos...
Helen ShawOctober 26, 2006

•Citic Group, China’s government entity that acquires energy companies abroad, has agreed to purchase Nations Energy Company’s oil assets in Kazakhstan for about $1.91 billion. The oil field’s current production and proven reserves would be used to meet China’s energy needs. The deal, pending government and shareholder approval, is expected to close in December.

•John Thain, the New York Stock Exchange chief executive, has expressed openness toward changing the structure of the $10 billion deal to merge with Euronext and to having more Europeans on the board. A rival bidder for Euronext is Deutsche Borse, which Euronext rebuffed in May. Euronext will vote on the NYSE offer in December.

•The committees of two large law firms, Dewey Ballantine and Orrick, Herrington & Sutcliffe, have recommended that the firms merge to create the seventh-largest law office in New York. The combined firm, which would be named Dewey Orrick, would have revenue of approximately $1 billion. The deal requires partners’ approval, which the firms hope to receive by mid-December.

•Jack Welch, retired General Electric chief executive, has partnered with Hack Connors, a Boston advertising executive, to consider a bid for the Boston Globe newspaper. The New York Times Company bought the Boston Globe in 1993 for $1.1 billion and has indicated that it is not inclined to sell the paper, which Welch and Connors are valuing at $600 million.

•FPL Group and Constellation Energy, which had agreed to a $12.5 billion merger, have abandoned their plans to merge due to uncertainty over regulatory and judicial approvals. State regulator scrutiny of mergers has risen since utility rates have increased. FPL, the parent company of Florida Power and Light utility, experienced difficulties in Maryland when Constellation’s Baltimore Gas & Electric subsidiary planned to increase electricity rates and decided the risks of the deal were to large.

•Sun Life Financial, the Canadian insurance company, has reviewed its options for its MFS subsidiary, MFS Investment Management, and decided not to sell it. In September, Sun Life had hired investment bankers to consider a possible sale of MFS, which industry observers had speculated would fetch $3 billion to $4 billion.

•Royal Dutch Shell has offered to acquire the 22 percent of Shell Canada that it does not already own. The offer values Shell Canada’s minority shares at approximately $6.8 billion and the company at $31 billion. Shell’s bid for the Canada unit would be conditional on more than 50 percent of the outstanding shares being tendered.