DealZone

Deals wrap: Coke acting like a VC

The Coca-Cola Co – the world’s largest beverage producer – has been thinking and acting more like a venture capital firm over the last few years, as it attempts to find new ways to increase profits and stay ahead of the competition,  according to a Reuters exclusive.

Coke’s Venturing and Emerging Brands unit, dubbed VEB, was founded in 2007 with the purpose of investing in independent brands, like Honest Tea and Zico coconut water. VEB president Deryck van Rensburg told Reuters the venture arm currently receives three to four unsolicited pitches per week from entrepreneurs. Van Rensburg added it was “not inconceivable” for it to work in other places, such as China, where there is “a huge entrepreneurial community.”

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Pharmaceutical company GlaxoSmithKline is also looking at smaller strategic acquisitions. Glaxo CEO Andrew Witty told French daily La Tribune: “We may do small targeted deals, but nothing big. We will not do a large transaction in pharma nor in generics.”

For a Big Pharma company like Glaxo small is a relative term, as it is reportedly kicking the tires on a potential acquisition of U.S. biotech firm Genzyme, along with rival Sanofi-Aventis. The rumored deal last week sent Genzyme’s market value soaring 15 percent to $16.7 billion.

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The trend of private equity firms buying up consumer-oriented food companies continued with the announcement that Lion Capital intends to purchase French frozen-food firm Picard Surgeles from rival BC Partners. According to Reuters, the deal would be France’s biggest leveraged buyout since the collapse of Lehman Brothers. The Reuters story also quoted “three people familiar with the matter” that Picard had a pre-deal value of about 1.5 billion euros ($1.9 billion).

The morning deal: Selling Abraxis

A sign for the NASDAQ Market site is seen in New York's Times Square, February 8, 2010. REUTERS/Shannon StapletonBiotechnology company Celgene has agreed to acquire Abraxis BioScience for $2.9 billion in cash and stock. Abraxis shared are up 20 percent on the news and that’s got to make Abraxis Chairman Patrick Soon-Shiong happy, he owns over 80 percent of the company’s outstanding shares.

Activity in the red-hot potash sector: the Belorussian government hopes to raise up to $7 billion from the sale of a minority stake in potash producer Belaruskali to help replenish state coffers.

Shares in BP jumped 8 percent today, helped by bid talk and optimism that the worst may be over for the stock as the company comes closer to halting the massive oil leak from its Gulf of Mexico well. Read about the fantasy M&A story here.

The morning deal: Charged up for an IPO

The Tesla Motors Model S hybrid car is seen plugged in to an electric outlet at the 2010 North American International Auto Show during press days in Detroit, Michigan, January 12, 2010.    REUTERS/Mark BlinchThe final pricing of Tesla Motors’ shares is expected later today. The electric car maker has yet to make a profit, and does not expect to make money until its Model S starts selling in significant volume. How strong will investors’ appetite be for his company?

*  Offshore oil and gas driller Noble agreed to buy privately held FDR Holdings for $2.16 billion. The deal, plus new Noble drilling contracts with Royal Dutch Shell, indicate the industry is preparing to increase offshore exploration despite the worst-ever oil spill in U.S. history.

*  Markets are on the mend but budget deficits need to be slashed and borrowing costs need to rise to avoid a new crisis, says the Bank for International Settlements in a call for action.

Love is all around in Toyota-Tesla deal

The stunning romance between global auto giant Toyota Motor Corp and Silicon Valley startup Tesla Motors began like a Hollywood tale – with a date in a fast car.

“I received a call that Mr. Toyoda was interested in meeting with me the next time he was in California, and I said that sounded great,” Elon Musk, chief executive of Tesla said.

The two men hit it off when they met in Musk’s home in Southern California about six weeks ago and went for a drive in the pricey electric Roadster sport car.

Tesla sticker shock?

Elon Musk

With highly touted plans for a new electric car in jeopardy, an overseas investor steps in to provide new capital and a much-needed endorsement.

GM? No, Tesla.

Remarkably, the terms of German automaker Daimler AG’s 10-percent stake in Tesla may have also helped the Silicon Valley electric-car start-up inch closer to GM in value.

Daimler’s vague disclosure of its purchase price as  “double digit million dollar” means Tesla is valued at a minimum of $100 million.
That would make Tesla, which was founded nearly six years ago, about one-eighth the size of 100-year-old GM.