Mergers & Acquisitions: Yahoo Looks Into Sale, Allied World and Transatlantic Break Up
Though mergers and acquisitions activity has kept up this year, new data indicates that M&A should slow down at least for the rest of this year as worries over economic growth and Europe’s sovereign debt problems and volatile markets weigh on company spending. “Volumes of global M&A activity dropped almost 20% in August compared to July,” said Dirk Pahlke, who is responsible for Rothschild’s German M&A advisory told Dow Jones Newswires. Even Germany, which has enjoyed one of the strongest upswings in M&A activity so far this year, is expected to slow down.
So far this year, worldwide M&A deal volume has risen more than a quarter to $1.94 trillion. Germany showed a 76% increase from big deals like the sale of cable operator KBW to Liberty Global (NASDAQ:LBTYA) and Volkswagen’s (PINK:VLKAY) take-over offer for MAN SE (ETR:MAN). But the trend is headed for a downturn. “The development of financing markets dominates M&A negotiations at the moment,” said Pahlke. “The following weeks will show how banks’ and bond market investors’ willingness to finance is compromised.”
With that said, here’s your cheat sheet to the latest M&A deals:
As more and more buyers express interest in Yahoo (NASDAQ:YHOO), the tech giant might be looking to sell. Private equity firm Silver Lake, working with the venture firm Andreessen Horowitz, is the latest to express interest in the popular search company. Other potential bidders include Microsoft (NASDAQ:MSFT) and Alibaba Group.
Allied World Assurance Co. Holdings (NYSE:AWH) and Transatlantic Holdings Inc. (NYSE:TRH) have mutually agreed to terminate their merger agreement. As part of the termination, Allied World will receive a termination fee of $35 million, plus $13.3 million of merger-related expenses. If Transatlantic enters into or recommends a competing transaction within the next year, it will have to pay Allied an additional $66.7 million.
Deutsche Boerse AG and NYSE Euronext (NYSE:NYX) expect an additional $1 billion in broad savings for customers if they are allowed to complete their $9 billion proposed merger, creating the world’s largest exchange operator. They now expect “collateral efficiencies” of up to $4 billion. Deutsche Boerse’s takeover of NYSE Euronext is currently facing an intense antitrust review in Europe. Just yesterday, Europe’s competition chief expressed concern that the merger would create a monopoly in derivatives.
India’s Infosys Technologies (NASDAQ:INFY) is close to acquiring Thomson Reuters’ (NYSE:TRI) healthcare business for $700 million to $750 million. Though both companies have declined to comment, the Business Standard newspaper says an announcement is expected shortly. Thomson Reuters announced plans to sell the unit, which supplies healthcare data and analysis to companies, government agencies, and health professionals, back in June. The business brought in roughly $450 million in revenue in 2010.
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Fifteen Democratic lawmakers have asked the Obama administration to approve AT&T’s (NYSE:T) proposed purchase of T-Mobile USA, sending the president a letter on Thursday arguing that the deal would reduce joblessness and encourage investment. “We urge the administration to resolve expeditiously your concerns and approve the proposed merger between AT&T and T-Mobile USA,” they said in the letter. The Justice Department recently filed a lawsuit aimed at stopping the deal, saying it would lead to higher wireless prices.