Last week’s biggest proposed deal by far — Alcoa Inc.’s $32.7-billion bid for Canadian rival Alcan — left the feel that there is more merger history to be written in the metals and mining sector in the near future. For now, Alcoa-Alcan lifted the total for North American M&A year-to-date to $709 billion, 43% above the $497.2-billion in dealmaking through May 11, 2006. But few stories were written about Alcoa’s acquisition prospects that didn’t also mention Rio Tinto PLC, BHP Billiton, and Xstrata PLC as parties looking for their own big aluminum deal. (Alcan says it is considering the offer.) Without Alcoa swallowing its neighbor to the north, either Alcoa, Alcan, or both were cited as likely targets.
The week’s second-largest deal similarly had the feel of the Canadian piece of a larger, global M&A puzzle. Thomson Corp. moved to divest its Thomson Learning and Nelson Canada subsidiaries to a private equity consortium for $7.8 billion. In the background, of course, was Thomson’s interest in acquiring Reuters, although no formal announcement had been made about that larger deal for the UK media company. Thomson’s divestiture was the largest of three private-equity buyouts among last week’s top ten deals.
Morgan Stanley should continue to remain the top-performing investment bank through May 11, according to data provided to CFO.com by mergermarket.
Morgan Stanley, the leader through the first quarter, served last week as the only adviser to the bidding party on the Alcoa/Alcan deal, and as adviser in two additional deals among the top four.
Alcoa to buy Alcan for $32.7 billion
Alcoa’s offer calls for a price of $73.25 per Alcan share, including $58.60 in cash and 0.4108 shares of Alcoa common, a 20-percent premium.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: BMO Capital Markets; Citigroup; Goldman Sachs; Lehman Brothers
Seller legal advisor: Sullivan & Cromwell
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton; Skadden Arps Slate Meagher & Flom; Stikeman Elliott
Apax Partners and OMERS Capital Partners to buy assets of Thomson Learning, and Nelson Canada, from Thomson Corp. for $7.75 billion
The price is all cash, and the transaction, subject to regulatory approvals and other conditions, is expected to close in the third quarter.
Seller financial advisor: Morgan Stanley; RBC Capital Markets
Bidder financial advisor: Evercore Partners; Atlas Advisors
Seller legal advisor: Shearman & Sterling; Torys
Bidder legal advisor: Simpson Thacher & Bartlett; Cahill Gordon & Reindel (Advising JPMorgan, Royal Bank of Canada, Citigroup, Royal Bank of Scotland Group, and UBS as debt providers)
BAE SYSTEMS plc to buy Armor Holdings Inc. for $4.95 billion
The definitive agreement calls for a price of $88 a share, a 7.1-percent premium. The transaction is expected to close in the third quarter.
Seller financial advisor: Goldman Sachs; Merrill Lynch
Bidder financial advisor: UBS
Seller legal advisor: Kane Kessler
Bidder legal advisor: Cravath Swaine & Moore