Merger Monday; a healthier menu

April 20, 2009

SUNAround $15 billion in deals has come tumbling down the pike in three relatively juicy acquisitions. While not stuffed with exotic structures and full-fat bank loans, these deals appeal to a more refined palate: Oracle swooped on Sun after attempts by IBM and Sun to strike a deal fell through; Pepsi bid for its two biggest bottlers; and GlaxoSmithKline upped the dosage of deals in drugs with a pact to buy skin specialist Stiefel Labs.

Oracle’s deal is the gem. Larry Ellison, never light on cash, seems to have let IBM do all the haggling. Oracle’s offer of $9.50 a share is only a dime above where IBM and Sun were talking just last week. Pepsi’s move appears to be about protecting its marketing machine — bottlers have been trucking around Orange Crush and other competing Dr Pepper Snapple flavors. As for Glaxo, the deal is hardly mega at just under $3 billion, but it does have an interesting private equity component: Buyout firm Blackstone Group has a stake in privately held Stiefel Labs.

There are other tidbits there, but these specials are far more enticing. For an excitement-starved M&A market, one could be forgiven for treating the salad bar like a smorgasbord.

Deals of the day:

* Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group have submitted bids to buy the Japanese retail brokerage unit of Citigroup in a deal that could raise about 600 billion yen ($6 billion), five people with direct knowledge of the sale said.

* Belgian biotechnology group Galapagos inked a deal with Merck that could be worth over 192 million euros ($251.7 million), sending its shares to a 14-month high.

* South Africa’s No.3 drug maker Cipla Medpro SA is still considering a 2.1 billion rand ($236.4 million) buy-out bid by rival Adcock Ingram, the firm said.

* UBS is selling its Brazilian business back to its original owners for about $2.5 billion, boosting its capital despite a small loss and potentially cutting the need for a capital hike.

* Libyan Foreign Bank said it planned to raise its capital 10-fold to $10 billion to finance expansion in Europe and Africa and would raise its stake in HSBC affiliate British Arab Commercial Bank.

* The new chairman of miner Rio Tinto Jan du Plessis said Rio’s board was committed to the group’s proposed $19.5 billion tie up with China’s state-owned Chinalco, playing down talk the group had a plan B.

* The sale of the public services unit of bankrupt computer services firm BearingPoint Inc to accounting firm Deloitte LLP for $350 million, was approved in court.

(PHOTO: Sun Microsystems Chairman and CEO Scott McNealy at a keynote address on the fifth day of the week-long Oracle Open World Conference at the Moscone Center in San Francisco, December 6, 2001 REUTERS/Lou Dematteis)

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see