M&A Weekly Recap: Eaton to Acquire Cooper Industries, Siemens Shopping

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Monday

Barclays (NYSE:BCS) will divest its $6.1 billion investment in BlackRock (NYSE:BLK), which comprises a 19.6 percent economic interest in the company. The transaction will take place through an offering and a related repurchase by the United States asset manager of up to $1 billion in shares.

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Micron’s (NASDAQ:MU) offer to acquire the bankrupt company Elpida Memory is rejected by its bondholders as insufficient, says a Reuters report. In reaction, creditors have contacted South Korea’s Hynix (HXSCF.PK) and U.S.-based GlobalFoundries, concerning the possibility of selling the company to them.

Worldwide power manager Eaton (NYSE:ETN) will acquire Cooper Industries (NYSE:CBE), and will become Eaton Global Corp., which will be incorporated in Ireland. The transaction is at $72 per share in cash and stock, with a value of $11.8 billion, and is expected to close in the second half. The stock price represents a 29 percent increase over Cooper’s Friday close, and is around 14 times earnings before interest, taxes, depreciation and amortization, says Bloomberg. The merger is forecast to generate approximately $535 million in yearly synergies by 2016, and be accretive to operating earnings per share at 35 cents in 2014 and 45 cents in 2015. Shares of Hubbell (HUB.A) and Accuity (NYSE:AYI) move up in sympathy.

Bidding participants for Iglo Group are down to three: Blackstone (NYSE:BX), BC Partners and PAI, according to Reuters. Iglo is the largest frozen food company in Europe, and the transaction price could be as high as €2.9 billion. The company was able to increase its revenue and margins last year, even as it operates in a low-growth sector, due to consumers’ preferences switching from frozen foods to fresh or chilled.

Google (NASDAQ:GOOG) plans to conduct a “listening tour” of Motorola Mobility’s (NYSE:MMI) operations, now that the final stage of its purchase of that firm has been passed, says a source to TechCrunch. The inevitable layoffs will follow soon after the event; Motorola currently has 20,500 employees, to Google’s 33,000.

Tuesday

Blackstone (NYSE:BX) is acquiring Accor’s challenged U.S. budget hotel business for $1.9 billion. Accor, which is a French hotel group, wants to concentrate on growth outside of the United States, but Blackstone’s plans call for putting “significant capital” into the Motel 6 properties in order to “accelerate the expansion of the franchise base”.

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Benihana (NASDAQ:BNHN) okays its purchase and being taken private by Angelo, Gordon & Co.’s Private Equity Group, for a price of about $296 million. The transaction features an offer of $16.30 per share, which is 46 percent above the average close for the 30 days that ended March 13th, when the company reported that it was ‘exploring strategic alternatives’. Observers are monitoring other similar-sized restaurant sector names, such as Kona Grill (NASDAQ:KONA), O’Charley’s (NASDAQ:CHUX), and Texas Roadhouse (NASDAQ:TXRH), following P.F. Chang’s China Bistro’s performance after going private recently. Meanwhile, shares of Benihana zoom more than 20 percent in late afternoon trading.

BlackRock (NYSE:BLK), Waddell & Reed (NYSE:WDR) and Norway’s SWF make a 20 percent, $1.6 billion investment in Formula One Group from CVC Capital Partners, ahead of its Singapore initial public offering, which is due in June.

In an investor conference, United Tech (NYSE:UTX) CEO Louis Chenevert reaffirms that he is confident that the firm’s $16.5 billion purchase of Goodrich (NYSE:GR) will close in July. The European Union has given itself to the end of August for completion of its antitrust evaluation, but Chenevert says that “We have done the right things to wrap this deal up”.

Shares of RailAmerica (NYSE:RA) jump following word that Berkshire Hathaway (NYSE:BRKA) (NYSE:BRKB) might be thinking about acquiring the firm from majority-owner Fortress Investment.

Wednesday

Monsanto (NYSE:MON) acquires private equity Precision Planting for $210 million in cash and $40 million linked to a performance-based payment. The move should help reinforce the company’s tech that improves efficiencies in farming.

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Uranium major Cameco (NYSE:CCJ) might be planning an acquisition in the near term, judging by its intention to raise as much as $1 billion via a combination of securities, says BMO Capital. The analyst notes receding uranium equity valuations, and the firm’s strong funding capability. On the shopping list might be Paladin Energy (PALAF.PK), Denison Mines (AMEX:DNN), and UEX Corp. (UEXCF.PK).

Siemens (NYSE:SI) could be in the market for approximately a “couple of billion” euros worth of industrial software, said its CEO Peter Loescher at an investor conference. He added that “The core focus of Siemens is organic growth with bolt-on acquisition opportunities if they make sense.”.

Shares of Cove Energy (CNVGF.PK) rose in London to 240p, which tops the new 240p per share offer from Thailand’s PTT. The rise might indicate that Royal Dutch Shell (RDS.A) will raise its offer. Andrew Peaple of Heard On The Street figures that RDS might yet bid as much as $2.5 billion for Cove, and that it has more bidding capital that does PTT; the former’s net debt to equity is 9.9 percent, compared to the latter’s 33 percent.

Thursday

Royal Dutch Shell (NYSE:RDSA) allows its bid of $1.8 billion for Cove Energy (CNVGF.PK) to go to June 13, following Thailand’s PTT Exploration’s higher offer of $1.9 billion on Wednesday. The action drove shares of Cove to 249p in London, which represents a rise of 11.2 percent, which tops PTT’s offer of 240p. However, if push comes to shove, some observers believe that Shell might go as high as $2.5 billion, as that firm says it’s “considering its options and will make a further announcement if appropriate”.

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General Mills (NYSE:GIS) acquires the Brazilian company Yoki Alimentos for 1.75 billion reais, or $857 million, in an arrangement that will help it grow its footprint in food markets in Latin America. Under the deal, General Mills assumes 200 million reais ($98 million) in outstanding debt.

Benefits for Kinder Morgan (NYSE:KMI) from the finalization of its purchase of El paso, include larger cost savings of $400 million annually, which is $50 million better than earlier estimates; and the firm now expects to declare dividends at a minimum of $1.40 for 2012, which represents a 5 cent increase from its previous plan.

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Friday

PC maker Dell (NASDAQ:DELL) is said by Bloomberg to be conducting discussions over the possible acquisition of systems management software supplier Quest Software (NASDAQ:QSFT), as the former continues its shift to higher-end business customers. Shares of Quest moved significantly higher on the news, and currently stand far above the March offer of $23 from private equity firm Insight; the former’s market cap is approximately 10 percent of that of would-be purchaser Dell. Further, it’s possible that interest in Quest’s competitor BMC Software (NASDAQ:BMC) could perk up if Dell does go through with the acquisition.

Lehman Brothers (LEHMQ.PK) says that it will pay $1.58 billion for the remaining 26.5 percent investment in apartment major Archstone, from Bank of America (NYSE:BAC) and Barclays (NYSE:BCS). As a part of the deal, Sam Zell’s Equity Residential (NYSE:EQR) will get a break-up fee of $150 million from Lehman and the banks, since it also tried to acquire the stake in Archstone.

The European Union gives its approval to Eastman Chemical (NYSE:EMN) for its acquisition of Solutia (NYSE:SOA) for a price of $3.4 billion. Eastman forecasts that the transaction will be immediately accretive, and that the combined group should be saving approximately $100 million in annual costs by the end of 2013.

Shares of satellite imagery companies DigitalGlobe (NYSE:DGI) and GeoEye (NASDAQ:GEOY) move up in tandem on rumors of a higher bid for the former, by the latter. DGI rejected a $17 offer from GeoEye earlier in May.

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