DONE DEAL! M&A Activity of the Week

Another week of deals off the table and forwarded to operations. Here’s your Cheat Sheet to mergers and acquisitions completed last week:

  • The $13.7 billion all-stock merger between Duke Energy (NYSE:DUK) and Progress Energy (NYSE:PGN) will unite two massive utilities companies.  The new environment post-merger will be telling from a political standpoint, because both companies’ CEOs have expressed commitment to reducing their contribution to greenhouse gases, by emphasizing natural gas instead of coal, for example. Duke Energy will need to become a leader in the Southeast to push for energy efficiency and support Congress-proposed Clean Energy Standards (CES), or reliance on energy alternatives to produce electricity.
  • Dupont (NYSE:DD) agreed to acquire Danisco, the industrial enzyme and food ingredient producer, for $5.8 billion in cash, an approximate 25 percent premium to last Friday’s closing price.  This acquisition will boost DuPoint’s industrial biotechnology segment and allow it to enter the high-growth food and energy businesses.  This deal is another step for DuPont in filling in the gaps on its “farm to fork” agriculture and nutrition strategy.  The deal is part of DuPont CEO Ellen Kullman’s push to transform from a chemicals company to a firm dedicated to science-focused product innovation.
  • It looks like the M&A love triangle between Simon Property (NYSE:SPG), Capital Shopping Centres (LON:CSCG), and the Trafford Center mall has finally come to a resolution.  After objecting to CSC’s plan to issue new shares and therefore dilute its holdings to acquire the Trafford center, Simon Properties made a $4.5 billion bid to acquire CSC.  CSC reduced the amount it was willing to pay for Trafford to counteract Simon’s offer, while the Peel Group will now own approximately 23 percent of the new CSC, enough to prevent any other hostile bids.
  • AIG (NYSE:AIG) may be one tiny step closer towards paying back the U.S. Government.  The company recently agreed to sell Nan Shan, its Taiwan insurance unit, to a group led by Ruentex for $2.16 billion.  This deal comes as somewhat of a relief to AIG because it has been attempting to sell off Nan Shan for over a year, and regulators halted an earlier bid.
  • ABB (NYSE:ABB), the Swiss engineering firm, extended its $3.1 billion tender offer for Baldor Electric (NYSE:BEZ), the U.S. industrial motors company, to the middle of next week.  The Baldor acquisition is part of ABB’s plan to capitalize on increased demand for energy efficiency, as industrial motors use about 25 percent of the world’s generated electricity.
  • Lundin Mining and Inmet Mining will merge to form Symterra, a Canadian copper mining company with a $9 billion market capitalization.  Mining deals have been big in the past year, as have commodity prices.  Lundin and Inmet will be able to take advantage of their pooled capacity to produce 500,000 metric tons of copper by 2017, which only bodes well with the current trend in copper prices.

Not all deals get done. Don’t Miss: The Rumor Mill: Mergers & Acquisitions in Question >>

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