Deals wrap: AT&T’s crystal ball

The at&t logo is seen at their store in Times Sqaure in New York April 21, 2010. REUTERS/Shannon StapletonAT&T’s surprise $39 billion deal to buy T-Mobile USA from Deutsche Telekom will create a new leader in the U.S. mobile sector and likely draw scrutiny. The regulatory challenge will be predicting what the dominant form of communication will be 3 to 5 years from now, analyst Evan Stewart said. The deal will take a year to close, in which time customers are expected to see improved network quality, according to AT&T.

Sprint Nextel risks being further eclipsed by Verizon and the new AT&T, which together would boast 230.3 million customers in the U.S., compared to Sprint’s less than 50 million, writes Michael J. de la Merced and Jenna Wortham of The New York Times.

Citigroup plans to slash the number of common shares outstanding and reintroduce a dividend after suspending payouts two years ago, taking another step in its long recovery from the brink of failure during the financial crisis.

Warren Buffett said he believes Japan’s devastating earthquake is the kind of extraordinary event that creates a buying opportunity for shares in Japanese companies and that his Berkshire Hathway is looking for more large-scale acquisitions anywhere in the world. “The United States is most likely where we will do something,” he added.

Facebook agreed to buy Snaptu, an application developer for mobile devices that are less sophisticated than smartphones, as the world’s largest Internet social network focuses on expanding its mobile services.

Deals wrap: HCP’s $6.1 billion acquisition

A sign is pictured on Wall St. near the New York Stock Exchange in New York November 25, 2008. REUTERS/Lucas Jackson HCP said it would buy most of the real estate assets of privately held nursing and assisted living firm HCR ManorCare from Carlyle Group in a $6.1 billion sale and leaseback deal. The deal follows a spate of acquisitions in the seniors’ housing and assisted living space.

Japan’s Otsuka Holdings could rise about 5 percent on its market debut on Wednesday after pricing its $2.4 billion IPO conservatively to reflect investor worries about its heavy reliance on profits from one drug.

In Hong Kong, the weak state of the IPO market is seen in Huaneng Renewables’ scrapped IPO plans and Datang’s low-priced IPO, the WSJ reports.

Deals wrap: Exchange consolidation

A man is reflected in the sign outside the Australian Securities Exchange (ASX) building in central Sydney August 23, 2010. REUTERS/Daniel Munoz Singapore Exchange has agreed to an $8.3 billion deal for Australia’s ASX. The first major consolidation of Asia-Pacific exchanges faces regulatory hurdles, including getting Australia’s parliament to lift a 15 percent ownership cap on the ASX. *View article *View article on SGX’s CEO *View graphic on world’s top 10 exchanges *View WSJ article

Communications cable maker CommScope said it is in talks with private equity firm The Carlyle Group to sell itself. It is the latest sign of resurgent acquisitions for private equity firms, which are under pressure to invest billions of dollars of capital raised in the past few years. *View article

Wind farm owner and operator First Wind Holdings, which is planning a $300 million IPO this week, may be a risky bet in the current energy climate, write Clare Baldwin and Scott Malone. *View article *View article

Noted: Goldman sees more utilities M&A

Goldman Sachs analysts say M&A among Europe’s utilities is likely to pick up this year, and name Britain’s Shanks, Drax, International Power, the country’s water companies (Severn Trent, Northumbrian Water, Pennon and United Utilities), and Edison of Italy as the most likely targets. (Shanks, of course, is already in the Carlyle Group’s crosshairs.)

The Goldman team looked at company ownership; the political and regulatory backdrop; and the firms’ sizes and relative valuations to come up with its top picks.

From the note, dated Jan 7:

“We believe M&A activity will pick up over the course of 2010 as current market valuations provide a once-in-a-cycle opportunity for potential acquirers, current economic weakness is likely to accelerate sector consolidation and private equity firms are likely to deploy capital as credit markets open up …

World’s financial center is moving, Carlyle co-founder says

USA/The financial crisis has made the world less focused on the U.S., which will have to face up to the fact that it is not as significant as before, Carlyle Group co-founder David Rubenstein told a large audience at the World Business Forum in New York:

“After World War II we were 48 percent of the world’s GDP; now we are about 20 percent of the world’s GDP… We have to get used to the fact that the dollar is relatively cheap and … that the dollar is probably not going to be the reserve currency that it’s been for so many years.”

Rubenstein said the center of the financial world won’t just be New York, but spread between here, London, Shanghai, Dubai, Sao Paulo and a few other cities.

Carlyle Group calls 2008 a “humbling experience”

Private equity firm The Carlyle Group gave a blunt assessment of 2008, when a financial crisis pulled three of its portfolio companies — German auto parts maker Edscha, energy company SemGroup
and Hawaiian Telcom — into bankruptcy protection or administration.
In its annual report, Carlyle told investors “the year 2008 was a humbling experience for us and most of the financial services industry. After several years of unprecedented growth, product innovation, geographic expansion, capital deployment and investment gains, our world changed dramatically.”
Going forward, Carlyle takes a cautious view.
“In 2008, the financial landscape change — and it will remain changed for the foreseeable future. Operating conditions for our portfolio companies will remain challenging. Transactions will be fewer and smaller. More equity will be required and debt terms will be less favorable. And hold periods will increase while returns will decrease.”

Click here to see the full Carlyle Group annual report.

Neuberger action moves to court

The sale of the Neuberger asset management arm of Lehman might have been agreed back in September, but it’s not quite a done deal.

The whole process has been rather messy — Lehman put a majority percentage of the prized asset management arm up for sale in August, prior to filing for bankruptcy.

The unit, one of Lehman’s best performing assets, drew interest from a number of private equity bidders such as Kohlberg Kravis Roberts, Hellman & Friedman, Blackstone, Bain Capital and Clayton Dubilier & Rice, sources previously said.