Big Deals Flashcards
Vodafone Mannesmann
~$180 billion
1999-2000
All-stock, hostile deal
Big Deals and Almost Deals with big political considerations
March 2017 PSA / Opel (GM) (France, England, Germany)
Feb 2017 KraftHeinz Unilever (England, Netherlands)
2016 GE Alstom (France)
2016 Megadeals
Tyco / Johnson Controls (1/25/2016) ChemChina / Syngenta (2/3/2016) Abbott / St. Jude Medical (4/28/2016) Bayer / Monsanto (5/23/2016) Microsoft / LinkedIn (6/13/2016) Softbank / ARM (7/18/2016) Enbridge / Spectra (9/6/2016) BAT / RAI (10/21/2016) ATT / Time Warner (10/22/2016) Qualcomm / NXP (10/27/2016) GE / Baker Hughes (10/31/2016) CenturyLink / Level 3 (10/31/2016) Sunoco Logistics Partners / Energy Transfer Partners (11/21/2016) 21st Century Fox / Sky (12/9/2016) Praxair / Linde (12/20/2016)
2015 Megadeals
Cheung Kong / Hutchison Whampoa (1/9/2015) Heinz / Kraft (3/25/2015) Royal Dutch Shell / BG (4/8/2015) Mylan / Perrigo (4/8/2015) Teva / Mylan (4/21/2015) Charter / Time Warner Cable (5/26/2015) Avago / Broadcom (5/28/2015) Anthem / Cigna (6/20/2015) Energy Transfer / Williams (6/22/2015) Shareholders / Paypal (7/6/2015) Teva / Allergan (7/27/2015) Berkshire / PCC (8/10/2015) ABI / SABM (10/7/2015) Dell / EMC (10/12/2015) Canadian Pacific / Norfolk Southern (11/17/2015) Pfizer / Allergan (11/23/2015) Dow / DuPont (12/11/2015)
2014 Top 15 Big Deals per ThomsoneOne
Comcast / Time Warner Cable (2/13/14) Actavis / Forest Labs (2/18/14) Facebook / WhatsApp (2/19/14) Numericable / SFR (3/11/14) Holcim / Lafarge (4/7/14) CITIC Pacific / CITIC Ltd (4/16/14) GE / Alstom (4/30/14) ATT / DirecTV (5/18/14) Medtronic / Covidien (6/15/14) Reynolds / Lorillard (7/15/14) Kinder Morgan / Kinder Morgan Energy Partners (8/10/14) Investor Group / Sinopec Sales Co (9/14/14) Actavis / Allergan (11/17/14) Halliburton / Baker Hughes (11/17/14) BT Group / EE (12/15/14)
2013 Top 15 Big Deals per ThomsonOne
Investor Group / Dell (Feb 5)
Liberty Global / Virgin Media (Feb 5)
Comcast / NBCUniversal (Feb 12)
Berkshire Hathaway and 3G / Heinz (Feb 14)
Thermo Fisher Scientific / Life Technologies (Apr 15)
Zoetis split-off from Pfizer (May 22)
Valeant / Bausch and Lomb (May 27)
France-SME Financing / CDC-SME Financing (July 12)
Loblaw / Shoppers Drug Mart (July 15)
Telefonica / E-Plus Mobilfunk (KPN) (July 23)
Publicis / Omnicom (July 28)
Verizon / Verizon Wireless (Sep 2)
Oi / Portugal Telecom (Oct 2)
American Realty Capital Property / Cole Real Estate
Investments (Oct 23)
Westfield Retail / Westfield Group Australia/NZ (Dec 4)
2012 Top 15 Big Deals per ThomsonOne
Glencore / Xstrata (66%) (2/7/2012)
Shareholders / ConocoPhillips-Refining (4/12/2012)
FROB - Banco Financiero y de Ahorros (5/25/2012)
Walgreens / Alliance Boots (6/19/2012)
ABI / Grupo Modelo (6/29/2012)
CNOOC Canada Holding / Nexen (7/23/2012)
China Telecom / China Telecom 3G Assets (8/22/2012)
Shareholders / Kraft Foods (9/17/2012)
SoftBank / Sprint Nextel (70%) (10/15/2012)
NK Rosneft / TNK-BP (50%) (10/22/2012)
NK Rosneft / TNK-BP (50%) (10/22/2012)
Freeport-McMoRan / Plains Exploration (12/5/2012)
Abbvie Spin (12/10/1012)
SAREB / Bankia SA - Bad RE Assets (12/21/2012)
FROB / Bankia SA (12/26/2012)
2011 Megadeals
Fiat Spin (1/3/2011) Duke/Progress Energy (1/10/2011) AIG Preferred (1/14/2011) Cargill/Cargill (1/18/2011) AMB Property/ProLogis (1/31/2011) J and J/Synthes (4/27/2011) Takeda/Nycomed (5/19/2011) Marathon Downstream Spin (6/23/2011) BHP/Petrohawk (7/14/2011) Express Scripts/Medco (7/21/2011) UT/Goodrich (9/21/2011) Nippon Steel/Sumitomo (9/22/2011) Kinder Morgan/El Paso (10/16/2011) Deutsche Boerse / NYSE Euronext (12/2/2011)
Thermo Fisher / Life Technologies
April 2013 announcement
Life Technologies itself the product of a merger of Invitrogen and Applied Biosystems
Thermo Fisher, a medical and scientific devices company, created in a merger of Thermo Electron and Fisher Scientific in 2006
LT was a leading DNA sequencer and tester
Losing bidders were Sigma-Aldrich (chemicals for research labs), and a PE consortium of Blackstone Carlyle KKR and Temasek
Valeant, Baush and Lomb
May 2013
Bausch: contact lenses, eye-care solutions, and prescription medicines
Diversifies Valeant out of dermatology
Bausch had been taken private by Warburg in 2007 LBO, filed for IPO that failed earlier in 2013
Telefonica / E-Plus Mobilfunk
July 2013
E-Plus: German subsidiary of KPN (Dutch phone company), third-largest mobile operator in Germany (after Vodafone and Deutsche Telekom)
Carlos Slim owned ~30% of KPN and threatened to block the transaction to increase price
Together with Telefonica’s #4 02 network, would have 47 million subscribers, become #1 by subscribers
At announcement, KPN to receive 4bn cash and 17.6% stake in Telefonica’s German subsidiary
Telefonica financing included 3.7bn rights issuance
~9x multiple
Part of long-term consolidation trend in EU telecoms;
Followed June announcement of Vodafone’s acquisition of Kabel Deutschland for €7.7bn
Loblaw / Shoppers Drug Mart
July 2013
Canadian Loblaw acquired Canadian Shoppers Drug Mart
Cash and stock deal (54% / 46%), giving Shoppers shareholders ~29% stake in NewCo
Shoppers is Canada’s largest drug store chain by revenue with presence in cities and strip malls
Loblaw to boost food offerings, expand pharmacy presence (5%/25% Canada mkt share respectively)
Weston family controlled Loblaw
Followed Kroger/Teeter ($2.4bn) and Empire (Canada) / Safeway Canada ops ($5.7bn)
Publicis / Omnicom
July 2013
Oi / Portugal Telecom
October 2013
Cash and stock merger of #1 Brazilian and Portuguese phone companies
Portugal Telecom owned stake in Oi prior to deal
Shareholders of Oi own 62% of NewCo
Former Portugal Telecom and current Oi CEO (and also current Portugal domestic operations head) to lead enlarged company after joining Oi in June
Capital increase as part of transaction
American Realty Capital Property / Cole Real Estate
Investments (Oct 23)
October 2013
14% premium
Amerian Realty on a “spree” of acquisitions; had been rebuffed earlier in year in effort to buy predecessor to Cole
Schorch likened it to a merger of Red Sox and Yanks
Made American Realty the largest single-tenant REIT, passing Realty Income Corp.
Largest REIT deal since 2011 AMB Property/Prologis $16.5bn
Next year, American Realty had an accounting scandal, with intentional falsehoods. Nick Schorsch CEO in trouble, replaced by Glenn Rufano. CAO accused Schorsch of ordering her to cover up and manipulate results. In 2015 they renamed as VEREIT.
Westfield Group and Westfield Retail Trust restructure to form Westfield Corp and Scentre Group
December 2013
International business becomes Westfield Corp
Australia NZ becomes Scentre Group
BT/EE
15 December 2014
CITIC Pacific / CITIC Ltd
Reverse IPO in HK
Kinder Morgan / Kinder Morgan Energy Partners
Roll-up of MLP
Sinopec Sales
September 2014, sale of 30% stake. Deal values the unit at ~$60 billion
AKA Sinopec marketing
China PEtroleum & Chemical Corporation, aka Sinopec
Sinopec Sales/Marketing is its gas station unit, which had 30k staties across China, most of which include a convenience store
Shares fell, as the deal attracted investment mainly from other Chinese/Hong Kong entities.
Numericable / SFR
Unclear when this started and when final offer announced, will have to check later, but now saying March 2014
SFR is Vivendi’s mobile and internet unit; in 2013 Vivendi announced plans to split it off as part of refocusing on entertainment (incl. Universal Music, Canal Plus). In October 2013, bought 20% of Canal Plus it did not own for $1.4bn and sold controlling interest in Activision Blizzard for $8.2bn; in November sold 53% stake in Morocco’s Maroc Telecom to Emirates Telecom for 4.2bn
Numericable was 40% owned by Altice, which was planning an IPO. Patrick Drahi is founder and controlling shareholder of Altice. Original sale was 80%, Vivendi sold remaining 20% in Feb 2015, 3 months after closing
Bouygues, 3d-largest French telecoms company, also made a bid but lost
Holcim / Lafarge
April 2014
Holcim Swiss
Lafarge French
Regulators had already been investigating Holcim, which had just done deals with Cemex around EU operations
Halliburton / Baker Hughes
November 2014
Called off in May 2016 after DoJ indicated it would seek to block the merger
Looked like it would go hostile
Halliburton submitted a list of board nominees (!)
Two oilfield services companies
Energy Transfer/Williams
Deal fell apart on collapse in energy markets
ET got out on 721 tax ruling upheld by DE Chancery and Supreme Court
Bayer / Monsanto
Largest all-cash deal to date
Johnson and Johnson / Actelion
January 26, 2017 Lazard advised (Ken, Jeffrey, Gluckman, Bachmann)
All-cash offer
Allowed deployment of JJ overseas cash
Sanofi competing bidder
Spin of Actelion’s early-stage R+D, named “Idorsia”, with JJ holding 16% and issuing convertible note with right to additional 16%
Essilor/Luxotica
16 January 2017
All-stock merger of largest pure-play eyewear companies
Essilor (French) strong in manufacturing and lenses, Luxottica (Italian) in retailing and frames
Luxottica’s Leonardo del Vecchio Executive Chair and CEO, and Executive Chairman of Essilor
Essilor’s Hubert Sagnieres Executive Vice-Chair, Deputy CEO, and CEO of Essilor International
Equal board representation
2 Luxottica CEOs resigned in 2014 - this deal addressed succession
Luxottica 4th-largest Italian public company at the time. Largest acquisition of Italian company ever. Followed ChemChinna acq Pirelli and HedelbergCement acquisition of Italcementi, before owned by the Pesenti family. Makes frames for Armani, Chanel, Prada. Owned Lenscrafters, Pearle Vision, Sunglass Hut
Roughly 1/3 each lenses, retail, wholesale pro forma. Combined ~27% global share; J+J next at 4%!
Del Vecchio to own 31% of combined company and accept standstill. Overall split 50/50
4 years of talks!
Citigroup and Rothschild advised Essilor, Mediobanca advised Delfin
Huntsman/Clariant
May 22, 2017
Both specialty chemicals companies
All-stock nil-premium merger (based on prices on the 19th of May)
$400m synergies
Clariant shareholders 52%
CEO Peter Huntsman, Chairman Clariant’s Hariolf Kottman; equal rep on board
Dual direct listings on NYSE and SIX, pursuing indexation on both
Targeting close by year-end 2017
IFRS filing of 10-Ks and Qs
Huntsman IPO of Venator (pigments and additives) to go forward as previously announced
Only “strong transaction commitment” from family shareholders on both sides (Huntsman family owned ~14% of H, C ??)
Huntsman tried to combine with Hexion in 2006 but 07 market collapse tore that up. There was a lawsuit
Clariant Citi UBS
Huntsman BAML Moelis
Safran / Zodiac
January 19, 2017
Both French aerospace suppliers: Safran engines, Zodiac seats and toilets
Safran paying special dividend in connection with merger
Zodiac shareholders first tender, then vote on merger. To allow Zodiac families, french government, and institutional shareholders to stay on. Forced people to take part
EUR200m synergies
Public tender offer, all-cash, at 26% premium to unaffected, 36% 3-month VWAP
TCI opposed the deal. Zodiac continued to revise guidance downwards.
In late May 2017, Safran and Zodiac announced that the deal terms would be revised downward
Crazy situation
Starboard/Perrigo
After Mylan bid for Perrigo in 2015, and Perrigo fended them off, Perrigo’s share price halved
On 7 Feb 2017, Perrigo agreed to give Starboard half the board
Starboard wrote a letter to Perrigo Sep 11 2016
BC / PetSmart
Dec 15 2014
Activist Jana drove the sale
Delaware court ruling on process for appraisal (said it was fair; PetCo couldn’t bid, no other strategics did, 27 PE firms contacted etc.)
Turnaround CEO Mike Massey (previously of Collective Brands, parent of Payless ShoeSource) has done a great job with the business so far
Returned $800m to investors in Feb 2016
Mylan / Perrigo
Mylan attempted to acquire Perrigo (based in Dublin, Ireland)
Cash and stock offer
Mylan trying to escape Teva (and did)
Tender rejected by shareholders
April 8, 2015 - Initial bid
April 21 - Teva bids for Mylan; Mylan and Perrigo boards reject bids
April 29 - Mylan improves offer for Perrigo
May 1 - Mylan sues K&E over Teva
June 19 - Teva announces it has a ~5% stake in Mylan
July 23 - Mylan uses stichting to defend itself. Teva drops pursuit and buys Allergan generics
Sep 17 - Perrigo publishes letter urging shareholders not to accept; countersuits aplenty
Oct 22 - Perrigo announces SBB and standalone plan (layoffs, disposal of vitamins/minerals biz)
Nov 3 - FTC approves purchase conditioned on sale of 7 Mylan generics
Nov 9 - Perrigo again urges shareholders to say no
Nov 13 - Mylan falls 12% short of the number of tendering shareholders
Teva: Barclays, Greenhill, K&E (switched to S&C)
Mylan: Goldman and Cravath
Perrigo: MS and JPM
CSC HPE Services
RMT to form DXC, announced May 24, 2016
Amazon / Whole Foods
6 June 2017
All-cash, $13.7bn EV
10.6x LTM EBITDA
$42.00/share, 27% premium to pre-announcement, 35% premium to price pre-Jana on April 7
Really thin announcement: no synergies, no advisors, no strategic rationale, nothing
Neuberger Berman had been pushing for changes for some time
Jana partners announced 9% stake on April 10, 2017 (worked fast!)
10 May, WFM announced new CFO, 5 new directors (replacing 5 retiring), and a new chair (who was already on the board)
Evercore hired to help with defense. Goldman advised Amazon
Albertson’s rumored to be exploring acquisition of WFM earlier in the year
John Mackey to remain as CEO, with HQ remaining in Austin, TX
WFM strong in fresh: 2/3 of sales, vs. 25% for most grocery chains
Gives Amazon good real estate locations, fresh distribution, industry knowledge, access to high-income consumers
Some rumor that Amazon will cut employees and seek to automate
Amazon and WFM first talked in 201[4] when Amazon was developing Prime Now. WF went dark and signed a deal with Instacart. Idea came back in 2016.
Albertsons made an offer to WFM, all equity. Rejected out of hand. So did another party. No process was run.
Leonard Green involved at some point as well?
Dutch hostile takeover
Only worked once: RBS/ABN Amro Failed: KHC/Unilever PPG/Akzo Nobel Teva/Mylan
ChemChina / Syngenta
Largest acquisition by Chinese company
Syngenta rebuffed Monsanto
Chemchina advised by
Syngenta advised by Dyalco, JPM, GS, UBS
Dow / Dupont
December 11, 2015
Nil-premium all-stock merger with 50/50 ownership
DuPont
Dow CEO Andrew Liveris to be Executive Chairman with focus on Material Science
DuPont CEO Edward Breen to be CEO with focus on Agriculture and Specialty Products
BoD - 16 directors: 8 Dow, 8 DuPont. 2 independent co-lead directors (one from each)
Intend to separate into three companies: agriculture (11/7), material science (45/6), specialty products (11/2)
Activists on both sides: Trian and Third point. A CEO had to leave. After the deal announced Loeb got in the mix again agitating for Specialty Products to be further split up
Closing originally H216. Now H217?
Zoetis
Pfizer animal health business
Feb 2013 IPO of minority from Pfizer
May 2013 split off announced
