As the US stocks trades mixed on Monday despite fears of a credit rating downgrade of French banks and the lack of a solution to Greece's debt problem, several M&A activities took place around the world. Some notable M&A activities are discussed here.
McGraw-Hill Plans to Split into 2 Public Companies
The McGraw-Hill Companies (NYSE: MHP) said Monday that its board of directors has unanimously approved a comprehensive Growth and Value Plan that includes separation into two strong public companies: McGraw-Hill Markets, primarily focused on capital and commodities markets, and McGraw-Hill Education, focused on education services and digital learning. The three-part Plan is designed to accelerate growth and increase shareholder value by: Creating two "pure-play" companies with the scale, reducing costs significantly to ensure efficient operating structures for the two new companies, and accelerating the pace of share repurchases to a total of $1 billion for the full year 2011. The Growth and Value Plan will create two focused operating companies with deeper customer engagement, right-sized cost structures, and increased management focus and accountability. The creation of two companies with tailored capital structures and financial policies will also enhance strategic and financial flexibility and establish two attractive equity currencies. MHP was trading higher by 2.22 percent to $39.58.
Broadcom to Acquire NetLogic Microsystems for $3.7 Billion
Broadcom Corporation (Nasdaq: BRCM) a global innovation leader in semiconductor solutions for wired and wireless communications, and NetLogic Microsystems, Inc. (Nasdaq: NETL) a leader in high performance intelligent semiconductor solutions for next generation networks, said today that they have entered into a definitive merger agreement. Under the agreement, NetLogic Microsystems shareholders will receive $50 per share in a transaction of approximately $3.7 billion, net of cash assumed. The acquisition will extend Broadcom’s infrastructure portfolio with a number of critical new product lines and technologies, including knowledge-based processors, multi-core embedded processors, and digital front-end processors, each of which offers industry-leading performance and capabilities. It also enables Broadcom to deliver best-in-class, seamlessly-integrated network infrastructure platforms to its customers, reducing both their time-to-market and their development costs. The transaction is expected to close in the first half of 2012. Broadcom currently expects the acquisition to be accretive to earnings per share by $0.10 on a non-GAAP basis in 2012. BRCM was down 2.03 percent to $32.76, while NETL was trading higher by 50.42 percent to $48 a share on Monday.
HSBC to Sell Non-Life Insurance Unit: Reports
HSBC Holdings plc (NYSE: HBC) is said to have launched the sale of its non-life insurance business, sources told Reuters on Monday, a global division worth about $1 billion and now part of the bank's plan to strip away non-core units. HSBC, Europe's biggest bank with a large presence across Asia, had sent out an information memorandum to potential buyers, with first round bids due by mid-October, Reuters reported citing a source familiar with the matter. HSBC operates non-life insurance businesses in Britain, France, Hong Kong and Singapore. The Hong Kong and Singapore operations alone bring about $400 million in annual premiums. HSBC's non-life insurance businesses earned profit before tax of about $1 billion in 2010, according to a presentation made by HSBC in June. HSBC's investment banking arm was running the sale process, the source added, who declined to be identified as the sale process was not public. HBC was trading at $39.08, down 2.42 percent on Monday.
Colfax to Acquire Charter International for $2.4 Billion
Colfax Corp. (NYSE: CFX) said Monday that it has agreed to acquire Charter International plc. Colfax said that both the companies have reached an agreement on the terms of a recommended offer by Colfax to acquire Charter for 910 pence (approximately $14.45) per Charter share, comprised of 730 pence in cash and a fixed ratio of 0.1241 Colfax common shares per Charter share. The stock portion of the consideration is valued at 180 pence based on the $23.04 closing price of Colfax shares on September 9, 2011 and an exchange rate of 1.5881 US$ per British pound. The acquisition, which has been unanimously recommended by the board of directors of Charter, will accelerate Colfax's growth strategy and move Colfax toward its vision: a multi-platform enterprise with a strong global footprint. Under the terms of the offer, eligible Charter shareholders will be permitted to elect, subject to availability, to vary the proportions in which they receive cash and Colfax common shares. The transaction values Charter's fully diluted share capital at approximately 1,528 million pounds Sterling ($2.4 billion) based on the closing price of $23.04 per Colfax share on September 9, 2011. CFX was trading lower by 11.24 percent to $20.45 a share.
