Deals wrap: Nasdaq, ICE drop NYSE bid
Nasdaq OMX and IntercontinentalExchange (ICE) dropped their $11.1 billion bid for rival exchange NYSE Euronext after it became clear the deal would not gain approval from U.S. antitrust regulators. The companies first offered to buy the New York Stock Exchange parent on April 1, aiming to curb a proposed friendly merger with Deutsche Boerse that was worth $10.2 billion when first announced in February. Deutsche Boerse responded to the news of the dropped bid by saying it plans to continue to pursue a merger with the Big Board parent.
In other exchange merger news, a consortium of Canadian banks and pension funds launched a $3.7 billion bid for TMX Group in the hopes of keeping Canada’s largest stock exchange from falling under foreign ownership. The bid tops a $3 billion offer for the exchange operator from the London Stock Exchange (LSE). The LSE said it remains committed to its own merger proposal with the TMX despite the higher rival offer, but should its bid fail it could find itself to be a takeover target, analysts said.
U.S. chemicals group DuPont won its takeover battle for Danish food ingredients company Danisco. The $6.4 billion acquisition is a part of DuPont’s push into the food technology business that CEO Ellen Kullman says will “create an industry leader in industrial biosciences and nutrition and health.”
BP is in talks aimed at buying out its Russian partners in its TNK-BP joint venture and other options to help secure passage of a stalled share swap and Arctic exploration deal, sources close to the matter told Reuters.
Yahoo and Alibaba Group will have a tough time resolving their feud over the Chinese company’s transfer of a major Internet asset despite a joint statement from both companies that said they were working towards a resolution, writes Reuters correspondent Melanie Lee.
Deals wrap: Microsoft acquires Skype for $8.5 billion
Microsoft plans to buy internet telephone network Skype for $8.5 billion, the biggest purchase ever for the world’s largest software company as it seeks to regain ground on growing rivals. The money-losing Skype has 145 million users on average each month and has gained favor among small business users. The deal would also give Microsoft a foothold in the potentially lucrative video-conferencing market. Skype, which is minority owned by eBay, allows people to make calls at no charge but also offers some paid features.
This article in the Guardian by Graeme Wearden asked telecoms analysts what they think about the Microsoft-Skype deal.
Reuters columnist Felix Salmon gives his opinion on how being public eases acquisitions for companies, using the Microsoft-Skype deal and Facebook’s earlier interest in Skype as an example. Salmon writes that had Facebook been public, it could have snapped up Skype itself instead of having Microsoft buy it to keep it out of Google’s hands.
Deutsche Boerse’s works council is refusing to back a merger proposal with NYSE Euronext, according to two people familiar with the company’s thinking. The exchange is close to releasing a formal statement on behalf of the management and supervisory board, a formal part of German corporate governance in a takeover situation.
Buyout firms Blackstone and KKR are weighing up offers for France Telecom’s stake in Mobistar, sources familiar with the situation said. The deal could value Belgium-based Mobistar at more than 3 billion euros ($4.3 billion).
Chemicals group DuPont said it was confident its increased $6.4 billion offer for Danisco would succeed, after a hedge fund stoked uncertainty over the takeover. DuPont affirmed that its revised bid of 700 Danish crowns ($135) per share for Danisco was its “best and final” offer.
Upscale handbag maker Coach is planning to list shares on the Hong Kong Stock Exchange, a move the New York-based company said reflected the importance of China’s luxury market. Last month, Coach said sales at its Chinese stores open a year had risen by a double-digit percentage.
Deals wrap: Teva trumps rival to win Cephalon bid
The world’s largest generic drugmaker, Teva Pharmaceutical Industries plans to buy U.S. specialty drugmaker Cephalon for $6.8 billion, topping an unsolicited bid by Canadian rival Valeant Pharmaceuticals International.
Warner Music’s $3 billion buyout could be done by the end of the week, according to a person familiar with the matter. Final buyout bids for the company are due today. Warner Music’s board effectively put itself up for sale in January when it appointed Goldman Sachs and AGM Partners to assess interest from external parties.
Danisco, the Danish food ingredients and enzymes producer urged shareholders to accept a higher takeover bid from chemicals group DuPont as fund managers welcomed the “decent offer” and said it would likely succeed. DuPont raised its offer for Danisco by 5 percent to 700 Danish crowns ($139) per share from 665, making its cash offer worth $6.64 billion.
Arch Coal said it will acquire International Coal Group in a $3.4 billion all-cash transaction to create the second-largest U.S. producer of steel-making coal. The news boosted International Coal shares in premarket trading.
Quest Diagnostics announced last month it would buy genetic-testing firm Celera Corp for $671 million, but word of a crucial scientific study helped the company negotiate a nearly $200 million discount in its deal. In this Wall Street Journal article, author John Jannarone asks, just how did Quest learn of the study months prior to its official publication?
Deals wrap: Merger Monday
Duke Energy agreed to buy Progress Energy for $13.7 billion in stock, creating the largest U.S. power company in terms of market value and generating capacity.
DuPont said on Sunday it will buy Danish food ingredients and enzymes firm Danisco for $5.8 billion to boost its position in the fast-growing food sector.
Genzyme shares rose more than 3 percent after Sanofi-Aventis confirmed the companies were in direct talks about a takeover deal.
Playboy founder Hugh Hefner is taking the company private.
Big banks missed by a decade their golden opportunity for a foothold in China, reports the WSJ. Reuters columnist Wei Gu puts Morgan Stanley and JPMorgan’s China joint ventures in perspective.
When shopping for a deal, stick to countries with good governance, according to this paper.
Is Monsanto looking at spinning off a toxic asset?
Unveiling better-than-expected results this morning, Monsanto also may have planted seeds for a spin-off of its herbicides business. It said it was creating a separate division for its Roundup and other herbicides. At very least, it may look to put the business in some kind of trust to protect shareholders from getting zapped. CEO Hugh Grant (pictured below) sprinkled some hints about where the company is headed:
“Over the last six years, Monsanto’s business has undergone a dramatic transition from a company historically built on chemical innovations to one focused on delivering enhanced seed offerings that help farmers get more out of each acre of farmland while reducing the footprint of the inputs used on that land. The actions announced today will allow our company to better navigate in today’s changing business environment and keep the company on a clear path for growth.
“We believe these steps are in the best interests of our shareowners, our customers and our employees. This is designed to bring more clarity and predictability to our Roundup business and greater focus to our growing seeds and traits business.”
The business, once a boomer for Monsanto, is turning out to be nearly as noxious to the company as it is to weeds. Gross profit from Roundup is seen dropping by half to about $1 billion annually as the company grapples with increased competition.
It has been thorny on the PR side as well. In a recent suit, Monsanto accused DuPont of unlawfully using Roundup technologies in soybeans and corn. DuPont responded by accusing Monsanto of trying to deny access to alternative technologies at a time when farmers are struggling with weeds that are increasingly resistant to current Monsanto products.
Add to the mix Monsanto’s announcement this week of a new five-year venture with Dole Fresh Vegetables focused on preserving or restoring taste and color to fruits and vegetables, and you have a company that seems to be more focused on manipulating life than on engineering death. What is far less clear is whether the sale of Roundup will win over Monsanto’s greener critics. In “Food Inc,” a documentary currently in theaters, the company is cast as Darth Vader.
In this month’s issue of Yes Magazine there is an excellent interview of Vandana Shiva, Director of the Research Foundation for Science, Technology and Natural Resource Policy in New Delhi, India. She speaks very eloquently about Monsanto’s “corporate agenda of total control” in developing countries via its system of biotechnological royalties on GMO seed supplies and the resulting bankrupting of small Indian farmers who foolishly adopt this unwise system of agriculture. Over 200,000 Indian farmers have committed suicide after being bankrupted by attempting Western high input agriculture – farmers whose ancestors have farmed sustainably on the same land for thousands of years. Monsanto is the very face of toxic modernity and its relentless poisoning of our living world, all in the name of profits and productivity. Thankfully, Wall Street has just given us all a closeup look at what happens when profits devoid of wisdom take control of our collective destiny. The developing world is probably beginning to re-think its misplaced trust in American business and Western models of economic development – the search for more sustainable models has begun in earnest. And not a moment too soon…
