2011 wasn’t without its mega deal. Earlier this spring, Sanofi-Avenits’s takeover of Genzyme closed for more than $20.1 billion.
However, Wall Street’s rainmakers have fallen into a rut as M&A deal flow has been drying up.
Even worse, regulators are pushing to block the largest deal of the year. This has Wall Street sweating as a handful of 10-figure deals that have yet to close.
For investment banks subsisting on M&A fees, months of negotiations may have been for naught.
HP is offering $42.11 a share for British firm Autonomy - more than a 64% premium when the deal was announced.
- Announced: August 18, 2011
- Expecting Close: October 3, 2011
- Acquirer Financial Advisors: Barclay's Capital, Perella Weinberg Partners
- Seller Financial Advisors: Bank of America Merrill Lynch, Citibank, Goldman Sachs & Co., J.P. Morgan, UBS, Qatalyst Group
- Risks: Shareholder approval following analyst downgrades over expense of purchase
Clorox has already rejected two bids by Icahn, who is now offering $78 a share directly to stockholders (down from $80 earlier this year), now valuing the deal at $10.3 billion. Clorox shares have rallied on the news, and the offer currently represents a 16% premium.
- Announced: July 15, 2011
- Expecting Close: N/A - unexpected bid
- Acquirer Financial Advisors: N/A
- Seller Financial Advisors: Goldman Sachs & Co., J.P. Morgan
- Risks: Unexpected bid, already rejected by management, turning hostile
The hostile takeover by SABMiller has already been rejected by Foster's board. SAB is now taking the fight to shareholders with an offer worth A$4.7675 a share after adjusting for a 13.25 Australian cent dividend to be paid by Foster's. Current Foster's management is promising to return A$500 million to shareholders and slash costs to revive profitability if shareholders reject the offer.
- Announced: June 21, 2011
- Expecting Close: N/A - hostile bid
- Acquirer Financial Advisors: J.P. Morgan, Morgan Stanley, Moelis & Co., RBS
- Seller Financial Advisors: Goldman Sachs & Co.
- Risks: Hostile bid, already rejected by management
Google's takeover offer for Motorola Mobility stunned the tech and telecom industries, marking the company's first true entrance into the OEM business. Google said the move was a play for patents, but analysts also saw the logical tie in with its Android operating system. On announcement day, the $40 a share offer represented a 63% premium on shares.
- Announced: August 15, 2011
- Expecting Close: Early 2012
- Acquirer Financial Advisors: Lazard Ltd.
- Seller Financial Advisors: Barclay's Capital, Centerview Partners, Qatalyst Group
- Risks: Antitrust scrutiny regarding an unfair competitive advantage in the handset business
The pairing will bring together two struggling pharmaceuticals. Takeda hopes to grow its share in Europe and Emerging markets. Previously, Nycomed was held by private equity.
- Announced: May 19, 2011
- Expecting Close: September 30, 2011
- Acquirer Financial Advisors: Deutsche Bank
- Seller Financial Advisors: Credit Suisse, Goldman Sachs & Co.
- Risks: Debt obligations following takeover
A proposed merger between Brasil Telecom and Tele Norte, which dates as far back to 2008, has been slow to close. But this May, things fell into place when the two companies' boards approved a restructuring. Tele Norte shareholders will receive 2.3122 shares in Brasil Telecom for each common share they own. This adds the final block of shares of Tele Norte that Brasil Telecom does not already own.
- Announced: May 24, 2011
- Expecting Close: November, 2011
- Acquirer Financial Advisors: Bank of America Merrill Lynch, Rothschild Group
- Seller Financial Advisors: Banco BTG Pactual, Credit Suisse
- Risks: N/A
Shares of Synthes common stock will be exchanged for CHF 55.65 in cash and CHF 103.35 in Johnson & Johnson common stock, a 10% premium on its recent price.
- Announced: April 27, 2011
- Expecting Close: June 30, 2012
- Acquirer Financial Advisors: Goldman Sachs & Co.
- Seller Financial Advisors: Credit Suisse
- Risks: Worries over management, Shareholder approval following recalls from both firms over past three years
More than 90% of Progress shareholders have agreed to the deal between the two energy companies, which will create one of the largest power corporations in the States (besting another offered deal). Progress Energy shareholders will receive 2.6125 shares of Duke Energy for each share they own. At the same time, Duke Energy will complete a three-to-one reverse stock split.
*The deal includes the assumption of $12 billion in Progress Energy net debt.
- Announced: January 10, 2011
- Expecting Close: December 31, 2011
- Acquirer Financial Advisors: J.P. Morgan
- Seller Financial Advisors: Bank of America Merrill Lynch
- Risks: Federal Energy Regulatory Commission approval, Criticism lodged by electrical workers at Duke Energy
Express Scripts will vault past CVS Caremark as the largest prescription management provider if this deal to take over Medco Health Solutions is approved - impacting 135 million Americans. Medco shareholders will receive $71.36 per share, worth more than $29.1 billion. The deal currently represents a 25% premium on the stock.
- Announced: July 21, 2011
- Expecting Close: First Half 2012
- Acquirer Financial Advisors: Citibank, Credit Suisse
- Seller Financial Advisors: J.P. Morgan, Lazard Ltd., Foros Group
- Risks: U.S. lawmakers urging FTC investigation into size of combined deal
The largest deal of the year may never come to be if the Department of Justice blocks the $39 billion merger between AT&T and T-Mobile. Should the deal be halted, AT&T would pay the Deutsche Telekom unit nearly $6 billion in break-up fees, including cash and spectrum rights.
- Announced: March 20, 2011
- Expecting Close: March 20, 2012
- Acquirer Financial Advisors: Evercore Partners, Greenhill & Co., J.P. Morgan
- Seller Financial Advisors: Citibank, Credit Suisse, Deutsche Bank, Morgan Stanley
- Risks: Suit by Department of Justice to block deal, Sprint complaint to block deal
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