M&A

Deals: Monsters in the Wings?

In our M&A Roundup for the week ended June 1, real dealmaking is tepid compared to the mega-billion-dollar buzz over Anheuser-InBev and Rio Tinto-B...
Roy HarrisJune 2, 2008

Talk of monster global acquisitions swirls around Anheuser-Busch ($45 billion, by Belgium-based InBev NV) and Rio Tinto PLC ($178 billion, by BHP Billiton Ltd.) But the picture for North American deals that have reached the agreement stage was several levels of magnitude more modest last week.

How modest? Even with North American dealmaking more than doubling from the prior week, the value of the 28 transactions done in the seven days ended June 1 reached only $7.83 billion — compared with 31 deals worth $2.74 billion.

There were, however, four billion-dollar-plus deals among the top 10 North American transactions in the latest week, according to data provided to CFO.com by mergermarket. Leading the way was Sterlite Industries India’s agreement to buy copper company Asarco LLC from Grupo Mexico S.A.B. de C.V. for $2.6 billion.

Overall, last week’s transactions increased year-to-date deals to 1,455 transactions, worth a total of $339.63 billion. In the prior year, a record for dealmaking, 2,233 had been agreed to by this time, totaling $805.89 billion.

Sterlite Industries India to buy Asarco LLC from Grupo Mexico S.A.B. de C.V. for $2.6 billion

Tuticorin, India-based Sterlite, which is involved in copper smelting, mining, and refining, won an auction for Tucscon-based Asarco, the integrated copper mining, smelting, and refining company that is owned by Grupo Mexico, of Colonia Roma Sur, Mexico. Grupo Mexico’s business extends to the mining and processing of zinc, silver, gold, molybdenum, and lead, along with copper.
Seller financial advisor: Lehman Brothers
Bidder financial advisor: ABN AMRO
Seller legal advisor: Baker Botts
Bidder legal advisor: Shearman & Sterling

XTO Energy Inc. to buy the oil properties in Bakken Shale from Headington Oil Co. LP for $1.85 billion

Fort Worth-based XTO, an oil and gas exploration and production company, agreed to acquire 350,000 acres of property with oil reserves in the Bakken Shale region from Headington, based in Montana for cash and equity. The transaction is expected to closed on or before July 15.
Seller financial advisor: JPMorgan
Bidder financial advisor: Internal
Seller legal advisor: Not available
Bidder legal advisor: Internal

AMP Capital Investors Ltd., Deutsche Bank AG, Public Sector Pension Investment Board, and Stichting Pensioenfonds Zorg en Welzijn to buy 25 percent of Compania Logistica de Hidrocarburos SA from Enbridge Inc. for $1.38 billion

The buyers are Zeist, Netherlands-based pension fund Stichting Pensioenfonds; Canadian pension fund Public Sector Pension Investment Board, Hessen; Germany-based investment bank Deutsche Bank; and Australia-based private equity firm AMP Capital Investors. The seller, Enbridge, is a Calgary, Alberta-based provider of natural gas and crude oil transportation services. The 25-percent stake is in Madrid-based Compania Logistica de Hidrocarburos, which is engaged in the transportation and storage of oil products. Terms call for the investors to pay buy $78.67 per share, a premium of 0.09 percent. Closing is expected in mid-June.
Seller financial advisor: Citigroup
Bidder financial advisor: Deutsche Bank
Seller legal advisor: Cuatrecasas – Goncalves Pereira, Castelo Branco
Bidder legal advisor: Uria Menendez; Uria Menendez; Uria Menendez; Uria Menendez

Severstal OAO to buy Esmark Inc. for $1.13 billion

Moscow-based metals and mining company Severstal agreed to acquire Chicago-based steel services company Esmark for $677.85 million in cash, and the rest in assumed debt. Under the deal’s terms, Severstal is offering $17 a share in cash, a premium of 1.86 percent.
Seller financial advisor: UBS
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Not available
Bidder legal advisor: Skadden Arps Slate Meagher & Flom

GulfMark Offshore Inc. to buy Rigdon Marine Corp. for $548 million

Houston-based oil-industry transportation services provider GulfMark agreed to acquire Houston-based Rigdon for cash and equity. The transaction is expected to close during the third quarter.
Seller financial advisor: Not available
Bidder financial advisor: Not available
Seller legal advisor: Not available
Bidder legal advisor: Not available

Tenaska Capital Management LLC to buy the Rolling Hills power generation facility of Dynegy Inc. for $368 million

Omaha-based private equity concern Tenaska, the affiliate of power producer Tenaska Energy Inc., agreed to acquire the facility from Houston-based Dynegy, a power, capacity, and ancillary services provider, for a cash in a deal expected to close in the third quarter.
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: Locke Lord Bissell & Liddell
Bidder legal advisor: Latham & Wakins

Coastal Marina LLC to buy Trump Marina from Trump Entertainment Resorts Inc. for $316 million

New York City-based gaming venture company Coastal Marina agreed to pay cash for Trump Marina, the Atlantic City-based property owned by Trump Entertainment.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Bear Stearns
Seller legal advisor: Weil Gotshal & Manges
Bidder legal advisor: Latham & Watkins

Daylight Resources Trust to buy Cadence Energy Inc. for $246 million

Calgary-based oil and gas trust Daylight Resources agreed to acquire Calgary-based Cadence, an exploration, development and production company, for $5.38 per share, representing a premium of 15.90 percent. Terms call for one Cadence share to be exchangeable for cash or 0.47-share of Daylight, with the maximum aggregate cash payment being $30.29 million. The transaction is expected to closed in mid- to late July.
Seller financial advisor: Tristone Capital
Bidder financial advisor: Scotia Capital
Seller legal advisor: Not available
Bidder legal advisor: Not available

NBTY Inc. to buy Leiner Health Products Inc. from Golden Gate Capital for $230 million

Bohemia, N.Y.-based NBTY, a manufacturer and distributor of nutritional supplements, agreed to acquire Carson, Calif.-based Leiner, a manufacturer of vitamins, minerals, nutritional supplements, and pharmaceuticals. Seller Golden Gate Capital is a San Francisco-based private equity firm. The price is subject to a working capital adjustment.
Seller financial advisor: Not available
Bidder financial advisor: Not available
Seller legal advisor: Not available
Bidder legal advisor: Not available

Bristol-Myers Squibb Co. to buy Kosan Biosciences Inc. for $191 million

New York City-based pharmaceutical company Bristol-Myers Squibb agreed to acquire Hayward, Calif.-based Kosan, a cancer therapeutics company. Terms call for Bristol-Myers Squibb to offer $5.50 a share in cash for each Kosan share, representing a 233 percent premium. The transaction is expected to close in about 30 days.
Seller financial advisor: Lazard
Bidder financial advisor: Credit Suisse
Seller legal advisor: Cooley Godward Kronish
Bidder legal advisor: Cravath Swaine & Moore

source: mergermarket