Deals: Buying American

In our M&A Roundup for the week ending May 25, the Saudis and Chinese make big investments; Alltel's LBO leads the pack.

Foreign governments were buyers in two of last week’s biggest deals. Saudi Basic Industries Corp. agreed to pay $11.6 billion for General Electric Co.’s GE Plastics Ltd., and China, through its State Investment Co., moved to purchase a $3 billion minority stake in private-equity concern Blackstone Group Holdings LLC.

The Chinese are taking the minority interest in conjunction with Blackstone’s plans for an initial public offering for $4 billion. Blackstone’s total value is $33.6 billion.

Activity in North America, however, was led by another in the year’s long line of private equity buyouts: this one the purchase of telecom provider Alltel Corp. by TPG Capital and GS Capital Partners for $26.9 billion. It was the fifth-largest deal — and third largest LBO— of the year.

Overall, deals totaled $71.6 billion, boosting the value of North
American M&A for the year to date to $827.9 billion, up sharply from $557.7 billion last year, according to data provided to CFO.com by mergermarket.

JPMorgan and Morgan Stanley both advised four of last week’s top deals, although Morgan Stanley missed out on the Alltel LBO.

TPG Capital and GS Capital Partners to buy Alltel for $26.9 billion

The definitive agreement calls for a price of $71.50 per share, a premium of 9.6 percent. The transaction is expected to close in the fourth quarter or next year’s first quarter.
Seller financial advisor: JPMorgan; Merrill Lynch; Stephens
Seller legal advisor: Wachtell Lipton Rosen & Katz
Bidder legal advisor: Akin Gump Strauss Hauer & Feld; Cleary Gottlieb Steen & Hamilton; Weil Gotshal & Manges

Saudi Basic Industries to buy GE Plastics from GE for $11.6 billion

The price includes assumption of liabilities. The acquisition is in line with SABIC’s strategy of growth and diversification, with the aim at making it one of the world’s leading manufacturing companies. Completion is expected in the third quarter, and is subject to customary closing conditions and regulatory approvals.
Seller financial advisor: Goldman Sachs; Lehman Brothers
Bidder financial advisor: Citigroup
Seller legal advisor: Weil Gotshal & Manges
Bidder legal advisor: Shearman & Sterling

Morgan Stanley Real Estate to buy Crescent Real Estate Equities Co. for $5.88 billion

The definitive agreement calls for a price of $22.80 per share, a premium of 5.5 percent. The transaction is expected to close in the third quarter of 2007.
Seller financial advisor: Greenhill & Co
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Pillsbury Winthrop Shaw Pittman
Bidder legal advisor: Goodwin Procter; Jones Day

Hologic Inc. to buy Cytyc Corp. for $5.47 billion

The definitive agreement calls for a price per Cytyc share of $16.50 cash and 0.52 Hologic shares, or a total of $46.46 per Cytyc share, a premium of 32.5 percent. Closing is expected in the third quarter.
Seller financial advisor: JPMorgan; Morgan Stanley
Bidder financial advisor: Goldman Sachs; Jefferies & Company
Seller legal advisor: Hogan & Hartson
Bidder legal advisor: Brown, Rudnick, Berlack & Israels; Latham & Watkins (Advising Goldman Sachs); Richards Layton & Finger

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