DealZone

Deals wrap: Threat to cross-border M&A

MARKETS-AUSTRALIA/STOCKSRising protectionism could kill off some multi-billion-dollar Asia takeovers this year, bankers say, noting that governments are increasingly keen to protect their national icons.

Qualcomm plans to buy Atheros Communications for roughly $3.2 billion in cash. Atheros makes chips for Bluetooth wireless and global positioning system devices.

Goldman Sachs is not giving its multimillionaire clients a lot of time or information to think about investing in a $1.5 billion Facebook private offering. The WSJ asks if Mark Zuckerberg is ready for prime time.

Google was busy acquiring start-ups owned by venture capital firms in 2010, WSJ reports.

Deals wrap: Powering up China’s IPO market

A power-generating wind turbine is seen in a wind farm of Alpiq in Le Peuchapatte in the Jura region, western Switzerland October 7, 2010. REUTERS/Michael Buholzer Sinovel, China’s top wind turbine producer, plans to raise up to $1.4 billion in one of the most expensive main board IPOs in Shanghai. The listing may well be a test for China’s IPO market, which had a mixed performance late last year.

Shares in BP hit a six-month high after reports rival Royal Dutch Shell considered a takeover bid, and that economic damages from its oil spill will be lower than forecast.

Brazil’s Petrobras offered to buy Eni’s 33.3 percent stake in Portuguese oil company Galp for 4.7 billion, business daily Diario Economico reported without citing sources.

from Breakingviews:

Goldman’s old-school Facebook deal sets new tests

Goldman Sachs' old-school Facebook deal brings a new set of challenges. The bank is raising up to $1.5 billion from clients to invest in the social network while putting in $450 million itself. Like Morgan Stanley's reported deal with online coupon service Groupon, it looks like classic merchant banking. With hot firms in the driver's seat, however, the banks could find themselves in for a wild ride.

Internet darlings, with their growth, profitability and cash, face little pressure to go public yet still have some use for what a fundraising can provide. So instead of an IPO, they rely on so-called D-rounds. This allows them to raise money at favorable valuations for internal use, while buying stock back from employees or early-round investors who want to cash out.

It's a calculated pay-to-play on the banks' part. By stumping up for Facebook and Groupon, Goldman and Morgan Stanley put themselves in a strong position to underwrite the eventual IPOs. They make the tech firms happy by providing stronger headline valuations, in Facebook's case $50 billion. And the intermediaries score points with their well-heeled clients by enabling them to put money into hard-to-access investments.

Deals wrap: Valuing Facebook

Facebook CEO Mark Zuckerberg listens to a question after unveiling a new messaging system during a news conference in San Francisco, California November 15, 2010.  REUTERS/Robert Galbraith Facebook has raised $500 million from Goldman Sachs and Russian Internet investment group Digital Sky Technologies in a deal valuing the social networking site at $50 billion, the New York Times reported, citing people involved in the transaction.

“Facebook doesn’t need to stay worth $50 billion forever — Goldman just needs to engineer an IPO valuation somewhere north of that, then exit quietly in the public markets,” writes Felix Salmon about the deal.

Italy’s Fiat set its sights on a majority stake in Chrysler after completing a long-planned demerger of its car-making activities from its truck and tractor business. Click here for a factbox on the demerger.

Deals wrap: Targeting healthcare

CAMBODIA/The healthcare industry is poised for a robust year of dealmaking in 2011 as a wider variety of players from scientific tool makers to hospital companies looks for new growth.

With many buyout firms fighting for survival and others hard-up for fresh funds, there’s an opportunity for investors to reform the private equity model in their favor. They shouldn’t squander it, writes columnist Jeffrey Goldfarb.

For private equity to be successful abroad it will need to leave behind many of its established profit models, writes Steven M. Davidoff in the NYT.

Deals wrap: Befriending the market

Facebook CEO Mark Zuckerberg speaks while unveiling the company's new location services feature called "Places" during a news conference at Facebook headquarters in Palo Alto, California August 18, 2010.  REUTERS/Robert Galbraith Facebook is likely to go public sometime after late 2012, a board member said. A stock market debut by a company valued in the tens of billions of dollars would be one of the most highly anticipated initial public offerings of the decade. *View article

Andrew Ross Sorkin from The New York Times takes a look at the secondary market’s implied market value for Facebook. Will Facebook ultimately be worth $33 billion or $3 billion? *View NYT article

Southwest Airlines’ $1.4 billion AirTran Holdings deal pays for itself, writes columnist Robert Cyran. *View article *Further reading

Deals wrap: Lowering expectations

Marius Kloppers, BHP Billiton Chief Executive, poses for photographs in central London August 25, 2010. REUTERS/Toby Melville BHP Billiton tried to dampen expectations it would substantially raise its hostile $39 billion bid for Potash Corp as bumper results showed it has plenty of firepower. *View article *View reaction from analysts and investors *View Potash Corp deal scenarios

Dubai World believes it can raise as much as $19.4 billion from selling key assets over eight years, if creditors back its restructuring, a document obtained by Reuters showed. *View article *View reaction from analysts and investors

Dell and Hewlett-Packard are expected to raise their bids for 3PAR, but technology investors and analysts warn of valuations taking a back seat to egos. *View article

Deals wrap: A successor for Buffett?

A fairly unheralded 44-year-old Chinese-American hedge fund manager, with a strong background as a human rights activist, has become a leading candidate to replace Warren Buffett, should he retire as founder and CEO of the $100-billion Berkshire Hathaway fund, according to the Wall Street Journal.

Li Lu, who was a student leader during the 1989 Tiananmen Square protests in Beijing, is the first person to be identified to potentially replace the soon to be 80-year-old Buffett, in what the WSJ story said is “among the most high-profile succession stories in modern corporate history.”

Buffett told the WSJ his retirement plans are not imminent and his job would likely be split after he leaves the company into separate CEO and investing functions. The WSJ story revealed David Sokol, the current chairman of Berkshire unit MidAmerican Energy Holdings, is considered the top contender for Buffett’s CEO role, while Li would potentially serve as one of Berkshire’s top fund managers.

Deals wrap: No timeline for Facebook IPO

Facebook CEO Mark Zuckerberg did not tip his hand about when the social networking giant would go public, when he sat down recently for an exclusive interview with ABC News’ Diane Sawyer.

“When it makes sense, right,” Zuckerberg told Sawyer, adding: “I mean, what we’re most focused on is just building these tools that help people stay connected with the people that they care about. And at some point along the path, I think it’ll make sense to have an IPO. But we’re not running the company to do that.”

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General Motors has announced it intends to purchase auto finance company AmeriCredit Corp for $3.5 billion. According to the Reuters story the deal “removes an uncertainty for GM as it prepares for a stock offering intended to reduce the U.S. government’s nearly 61 percent ownership stake.”

Deals wrap: SSL is on the market

Models pose with a replica of a condom during the 2001 Durex Global Sex Survey Press conference in Hong Kong November 27, 2001. REUTERS/Kin CheungReckitt Benckiser agreed to buy Durex condoms maker SSL for $3.8 billion. SSL stock jumped on the news as potential counterbidders could include Johnson & Johnson and GlaxoSmithKline, which are looking to expand their over-the-counter businesses. * View article

AIG is set to elevate Goldman Sachs to the top role for handling the initial public offering of its Asian life insurance unit, sources said. Morgan Stanley was an early favorite to lead AIA’s aborted IPO last year, before Prudential offered to buy the unit and IPO plans were shelved. The Prudential deal subsequently fell apart. * View article

Is Facebook worth $11 billion or $30 billion? Investors, and underwriting banks, have been salivating over an IPO for months. MSN Money takes a look at how to value the social-networking company. * View article