DealZone

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)

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