DealZone

Deals wrap: Rare air brings deal

The city of Davos is seen at sunset January 25, 2011.   REUTERS/Vincent Kessler  It took the rarefied air of the Swiss Alps to bring together the chief executives of Sanofi-Aventis and Genzyme  and pave the way for a $20.1 billion deal.

As the cream of the telecoms industry debates how best to make money from mobile data,Vimpelcom’s Alexander Izosimov  is alone in betting his balance sheet on it in unfashionable western Europe.

Chinese oil majors are set to accelerate their overseas buying spree in unconventional oil and gas assets, with an eye on technology key to help shift China’s reliance on coal to lower-carbon fuel over the next decade.

The bond of friendship doesn’t mean much when the government comes knocking on your door, the Wall Street Journal reports.

Warren Buffett will make his first trip to India next month and it could be a precursor to some deals, reports the Economic Times.

Deals wrap: Key facts about the Sanofi/Genzyme deal

Chris Viehbacher, CEO of Sanofi-Aventis, gestures as he speaks during a news conference to present Sanofi-Aventis' 2010 annual results in Paris February 9, 2011.   REUTERS/Charles Platiau  French drugmaker Sanofi-Aventis agreed to buy Genzyme with a sweetened $20.1 billion cash offer, plus payments tied to the success of the U.S. biotech group’s drugs, the companies said. Reuters has a factbox about the two companies, a timeline of Sanofi’s quest for Genzyme and a look at Sanofi’s patient CEO.

The London Stock Exchange’s bid to take over Canada’s TMX Group  is likely to navigate through a battery of regulatory reviews and emerge intact, even though investors are nervous about its chances.

In Asia however, tough regulatory regimes, cumbersome ownership structures and protectionist-minded governments mean cross-border mergers involving regional markets will be difficult.

Deals wrap: A rock & roll deal

Billie Joe Armstrong and Green Day perform "21 Guns" at the 2009 American Music Awards in Los Angeles, California November 22, 2009. REUTERS/Mario Anzuoni Warner Music Group is looking for potential buyers and Goldman Sachs is advising on the process, a source familiar with the matter said.

Rumbles of shareholder dissent show drugmaker Sanofi-Aventis is walking a tightrope as it enters the endgame in its drawn-out bid for biotech Genzyme.

A group of companies led by Brazilian beef processor JBS has arranged a financing package to bid for all or parts of Sara Lee, a source with direct knowledge of the situation told Reuters.

Deals wrap: Merger Monday

A worker attempts to repair power lines in Mobile, Alabama, September 1, 2005. REUTERS/Marc Serota 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.

Deals wrap: Genzyme bid hinges on new drug

Genzyme (GENZ.O), resisting a hostile bid from Sanofi-Aventis (SASY.PA), is open to a deal that links its value to the success of key drug Campath, the U.S. biotech’s chief executive was quoted as saying. But it was not up to Genzyme to suggest that to the French drugmaker, which has launched a $18.5 billion takeover offer for Genzyme, Chief Executive Henri Termeer was quoted as saying in French newspaper Le Figaro.

“This is one of the alternatives that could be explored. We are thinking about it with regard to the Campath molecule. This could be used by Sanofi or by other companies we talk to,” Termeer told the newspaper in an interview.

Global food companies are set to square up against emerging market buyers and private equity players to buy half of Yoplait, the world’s second-largest yogurt maker after French peer Danone (DANO.PA). General Mills (GIS.N), Nestle (NESN.VX) and Lactalis, Europe’s largest dairy group, all have sound strategic reasons to pursue the maker of Petits Filous yogurts and Yop drinking yogurt, valued at 1.5 billion euros ($2 billion) by its CEO Lucien Fa in a Reuters interview.

Deals wrap: Disentangling from AIG

A protester yells at people in the AIG office building during a rally against government bailouts in New York's financial district, April 3, 2009.     REUTERS/Brendan McDermid American International Group and the U.S. government are moving closer to a deal on how the Treasury Department would exit its investment in the bailed-out insurer, sources said. *View article *View Bloomberg article

Southwest Airlines will purchase AirTran Holdings for $1.04 billion in cash and stock in a deal that will allow Southwest to expand its presence in major East Coast markets. The move by Southwest puts pressure on all major rivals, who are trying to strengthen their eastern markets to leverage more premium-paying business travel. *View article

Consumer goods group Unilever will buy hair and skin care company Alberto Culver for $3.7 billion in the latest move to rebalance its portfolio toward higher growth lines. Analysts said the price of the deal looked high, but could be justified by cost savings and by skewing Unilever’s business to more high growth, high margin categories. *View article

from Breakingviews:

Genzyme shows how it can pressure Sanofi

Genzyme is showing how it can pressure Sanofi-Aventis. The U.S. biotech takeover target moved to unload its genetic-testing arm to Laboratory Corp on Monday for $925 million. The more Genzyme can do to fix itself up, the more likely it can squeeze its French suitor to sweeten its $18.5 billion takeover bid. Firms in the sector, once in play, almost always sell. A higher bid seems likely.

House-cleaning plans for the maker of rare-disease drugs are moving ahead. If Genzyme can fetch the same reasonable 2.5 times sales multiple for two other businesses it is shopping as it did from its genetic testing division, Genzyme will reap a total of about $1.3 billion. That's small beer, but all three units have been a management distraction. Last year, their combined operating margin was slightly negative.

Selling them off makes Genzyme more attractive. Moreover, they allow the top brass to focus on developing what looks to be a blockbuster drug for multiple sclerosis and fixing the firm's ongoing manufacturing problems, which would maximize value.

Deals wrap: No deal for NAB

An office worker walks past the AXA Asia Pacific headquarters in Melbourne December 17, 2009.  REUTERS/Mick Tsikas   National Australia Bank’s bid for AXA Asia Pacific has been blocked for a second time. The Australian competition regulator’s decision clears the way for AMP to make another bid for AXA Asia Pacific and that could come as early as Friday, according to an Australian Associated Press report. *View article *View article on NAB’s CEO

Sanofi-Aventis poured cold water on reports it had raised its offer for Genzyme, saying it was sticking to its bid of $18.5 billion. *View article *View article reporting Sanofi may raise bid

Deal making is a  prominent theme at the Aerospace and Defense Summit being held in Washington, D.C. EADS Chief Executive Louis Gallois said the company’s cash position of 9 billion euros gives it room for “reasonable” acquisitions. Northrop Grumman Chief Executive Wes Bush said the defense contractor has no plans to break itself up, and he would not forecast any large-scale mergers for the industry in the near term.*Full coverage of Aerospace and Defense Summit

Deals wrap: Factoring in China

Potash is piled into a large storage facility in Saskatoon after which it is loaded into train cars and transported in this December 2006 file photo. REUTERS/David Stobbe/Files Chinese and other investors have approached at least one big Canadian pension manager about a bid for Canada’s Potash Corp to rival BHP Billiton’s hostile offer. This is one of the first pieces of hard evidence to back up speculation that China is looking for a way to derail a takeover of Potash Corp by the powerful Anglo-Australian miner. *View article *View analysis on possible regulatory action from China *View Globe and Mail article on the concern about jobs and revenue in Saskatchewan

The recent M&A binge certainly suggests corporate treasurers are confident that whatever the near term may bring now is the time to expand. Are we headed for a recovery or is the buying spree just a case of too much money needing a place to go? *View analysis

Genzyme rejected an all-cash $18.5 billion offer from Sanofi-Aventis this week. Will the deal go hostile? Take a look at how events could unfold. *View article

from Breakingviews:

Sanofi, Genzyme play chicken over price

"Let me in and I might go higher." That in a nutshell is the message Sanofi-Aventis chief executive Chris Viehbacher is sending Genzyme's management in making public his $18.5 billion offer to buy the U.S. biotech company. The all-cash structure is intended to show that the French pharmaceuticals group is serious. But the lowball $69-a-share price has failed to move Genzyme's board. Viehbacher will be hoping that changes -- his threat of a hostile bid looks hollow for now.

One of his problems is that the price is hardly going to bowl Genzyme's shareholders over. Despite amounting to a near-30 percent premium over the undisturbed price before rumours started flying more than a month ago, Sanofi's offer values its target at about four times sales when biotechs usually go for five or six times.

His other problem is that without Genzyme's cooperation, the U.S. company's shareholders will know that any sweetening of an offer would be limited by uncertainty -- say to around $70 a share, the level news reports suggest Sanofi's board has authorized. That's because to have greater clarity, the French group would prefer first to have a good look at its target's books to help assess the extent of the industrial problems that have caused Genzyme to operate under the close monitoring of the U.S. Food and Drug Administration.