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Pin to quick picksBarclays Share News (BARC)

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Share Price: 202.35
Bid: 202.15
Ask: 202.25
Change: 1.35 (0.67%)
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Open: 202.50
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Big U.S. corporate takeovers drive 'Merger Monday'

Mon, 15th Apr 2013 21:55

* Thermo Fisher in $13.6 bln Life Tech takeover

* Dish Network bids for Sprint Nextel

* U.S. CEOs pursue large deals for growth, cost cuts

* Barclays No. 3 global M&A adviser, JPMorgan tops leaguetable

By Soyoung Kim

NEW YORK, April 15 (Reuters) - The more than $52 billionworth of deals announced on Monday morning made it the busiest"merger Monday" this year, as two large U.S. corporate takeoversunderscored increasing CEO interest in pursuing transformationaltransactions to boost growth and cut costs.

Dish Network Corp, the No. 2 U.S. satellitetelevision provider, made a $25.5 billion bid for Sprint NextelCorp, challenging the proposed acquisition of Sprint byJapan's SoftBank Corp, while Thermo Fisher ScientificInc struck a $13.6 billion deal to buy Life TechnologiesCorp.

Meanwhile, U.S. investment firm Royalty Pharma sweetened its bid for Irish drugmaker Elan Corp Plc toas much as $7.3 billion, formalizing its initial approach.

The day's slew of announced transactions brought the valueof global mergers and acquisitions so far this year to $650.2billion, up 14.5 percent from $568.1 billion during the sameperiod in 2012, according to Thomson Reuters data.

U.S. companies accounted for more than half of thatactivity, with $331 billion worth of deals through April 15, upfrom the 32 percent share in the same period last year, whendeal volumes in the country totaled $181.9 billion.

"If you're a well-capitalized company, one that has cash andaccess to capital, and if you have strategic imperatives, now isgoing to be looked at as a very compelling time to acquire,"said Paul Parker, head of global corporate finance and M&A atBarclays.

"Volatility has come down meaningfully, interest rates arelow, corporate cash levels are high and dilutive just sittingunproductively on balance sheets, and there is pent-up strategicdemand. This is why we are seeing industry and companytransforming deals."

The first four months of the year already saw several largecorporate deals, including the $23.2 billion takeover of ketchupmaker H.J. Heinz Co by Warren Buffett's BerkshireHathaway Inc and Brazilian private equity firm 3GCapital.

Other large deals include the $24.4 billion bid to take DellInc private by founder Michael Dell and buyout firmSilver Lake Partners, as well as the merger of US Airways GroupInc and AMR Corp, the bankrupt parent ofAmerican Airlines.

"There is increasing confidence in the United States as asafe haven and as a stable place to invest," Parker said.

"CEOs here have more visibility to their own companies'futures as well as the futures of the targets they're looking atin this market," he said, adding that the political and economicuncertainties in Europe and Asia continue to be an overhang.

European deal activity is down 23 percent to $138.4 billion,while Asia-Pacific saw a 10 percent decline in deal volumes to$91.4 billion, Thomson Reuters data shows.

Barclays, which was involved in two big deals announced onMonday, rose to No. 3 in the global ranking of M&A advisers, upfrom eighth place as of last Friday.

The bank was the sole adviser to Dish on its $25.5 billionoffer for Sprint, and advised Thermo Fisher along with JPMorganChase & Co on its acquisition of Life Technologies.

JPMorgan, with its role in advising Thermo, rose to No. 1 inthe league table, ahead of Goldman Sachs Group. DeutscheBank and Moelis advised Life Technologies on thedeal.

Mondays are often active days for merger news becausecompanies tend to finalize terms of a deal over the weekend andthen roll out the announcement before the market opens onMonday.

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