Key mergers and acquisitions: July
Date posted: 31st Jul 2014
This year global mergers and acquisitions have been valued at a whopping $2 billion. As such, you’d expect some of the deals to have involved household names - and you’d be right. Legal & General, House of Fraser, Apple, Carphone Warehouse, Halfords and Sainsbury’s have all inked deals in 2014.
July was no exception, as brands including BSkyB, Cath Kidston and Ferrero all penned high-value deals. TV tour de force ‘The Great British Bake Off’ even features. So here are some of July’s biggest deals:
BSkyB, 21st Century Fox and Love Productions
Rupert Murdoch’s BSkyB was arguably one of the most prolific companies this month, after announcing a smaller-scale takeover, followed by a much larger one. First off, BSkyB bought shares in Love Productions, the TV company responsible for runaway success story ‘The Great British Bake Off’, as well as headline-generating documentary ‘Benefits Street’.
Not content with taking a 70 per cent share in Love Productions, BSkyB mobilised the cheque book once more for a deal with 21st Century Fox for Sky Italia and Sky Deutschland. With these in its roster, BSkyB will be propelled to a market leading position in five countries. Its viewership will also rise from 30 million households to 97 million or more.
Cath Kidston and Baring Private Equity Asia
Spearheading Britain’s vintage revival is Cath Kidston, whose retro prints have made her company a household name. Earlier this month, Kidston was said to have made a veritable fortune for herself after selling a “substantial” number of shares to Baring Private Equity Asia.
Whilst specific terms of the deal haven’t been announced, it’s thought the company was valued at some £250 million as a result. Kidston herself, meanwhile, is said to have amassed a personal fortune of around £50 million.
Maplin and Rutland
Maplin has been a high street mainstay for some 40 years. Perhaps because of this it was sold around ten years ago for £244m. A change of fortunes, however, saw it shrugged off by Montagu this month for £85m. Rutland (which owns Pizza Hut) opted to take the retailer on, with a pledge that it will change direction imminently.
These changes will include a renewed focus on customer services and a much broader range of goods for sale.
Independent Vetcare and Summit Partners
In just three years, Independent Vetcare has grown from having 20 veterinary sites in Bath, Hertfordshire and Bristol to having 100 across the country. Original backers August Equity have shipped two other companies in recent times, with Independent Vetcare being the third. As for how much sealed the deal, all parties have kept quiet after it was done through an off-market transaction.
GDF Suez and Lend Lease
A truly international deal was signed this month between GDF Suez and Lend Lease. French gas and power group GDF continued with its recent expansion ventures by purchasing the UK facilities management arm of Australian property group Lend Lease. The deal will see GDF’s Cofely energy arm access a guaranteed revenue stream of £2.5 billion in the education, government, healthcare and retail sectors.
Imperial Tobacco, Salem and Kool
Recent developments in the world of e-cigarettes have prompted big tobacco firms to re-assess their business model. It has not only seen a notable upswing in patent applications lodged, but also a number of acquisitions. Unlike many of these other deals, though, Imperial’s latest acquisition wasn’t to reach new tech but new markets.
In taking on Salem and Kool, Bristol-based Imperial Tobacco (which makes JPS and Lambert & Butler) will take a ten per cent share in the US market. Given that the US accounts for 25 per cent of world tobacco profits once China is excluded, this makes the Imperial Tobacco deal arguably the biggest of its 100-plus year history.
AbbVie and Shire
Some $55 million changed hands when US drugmaker AbbVie finally managed to ink a deal with Dublin’s Shire plc. The deal didn’t just see AbbVie take on the opportunities and assets of Shire but also its enviable position as London-listed. In simple terms, this means the manufacturer of expensive medicines for rare treatments would be able to list in London as well, to enjoy the huge tax breaks this would include.
The deal is expected to provide AbbVie with locations in the Channel Island of Jersey, along with New York and Chicago.
Ferrero and Oltan
Ferrero doesn’t just make the semi-eponymous ‘Rocher’ treats famous among Christmas shoppers and ambassadors, but chocolate spread Nutella as well. These two brands alone, then, should give as good an indication as any just why it took on Oltan - one of the world’s largest producers of hazelnuts.
Turkish-based Oltan is worth around $500,000, although the terms of the takeover deal haven’t been announced - at least until regulatory approval has been secured. It makes a notable purchase for Italy’s Ferrero, which is still a family-owned business overseen by 89-year old patriarch Michele.
The summer holidays may be just on the horizon, but it seems the key decision makers in firms across the world aren’t letting their minds drift to beaches and deckchairs. If July is anything to go by, there’ll be no let up in mergers and acquisitions throughout August and beyond. By the end of this year, you’d expect the $2 billion already exchanged to be built upon rather significantly.