Supervalu Purchase in Trouble, A123 Systems Sale Blocked by Government: Merger and Acquisitions Update

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The proposed purchase of the grocery chain Supervalu (NYSE:SVU) by private-equity Cerberus Capital Management seems to be going nowhere, as the latter isn’t likely to obtain the funds for a leveraged buyout, say inside sources, who add that potential lenders are pulling back because they are dubious as to how the chain will manage the increased debt load as revenue declines. Another observer said that the lenders are pressuring Cerberus to place more money into the deal than it wants to. Supervalu’s market value has decreased, as it lost more than $2.5 billion during the past two fiscal years, due to increasing rivalry from discounters and heavy expenses to run its stores.

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The bankrupt battery manufacturer A123 Systems (NASDAQ:AONE) can not be sold without the consent of the United States government, as the firm received a $249 million grant from the Energy Department, say court documents. Thus far, Johnson Controls (NYSE:JCI) of Milwaukee and Wanxiang Group Corp of China are bidding over which will acquire A123, which produces  lithium ion batteries for electric cars. Moreover, the idea of a United States government-financed entity being sold to a Chinese competitor does not sit well with some politicians, who say that tech underwritten by American taxpayers should not fall into foreign hands.

On Thursday Carlisle Companies (NYSE:CSLannounced that it is acquiring the wire and cable maker Thermax-Raydex from Belden (NYSE:BDC) at a price of $265 million. The transaction should close by the end of 2012. The buyer said the purchase should add to its earnings in the first year.

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