Deals: Blame Canada

In our M&A Roundup for the week ending July 6, the year-to-date record of $100-billion-plus in activity is led by the biggest deal ever north of the border.

Kraft Foods Inc. to buy some biscuits and cereal products business of Groupe Danone SA for $7.2 billion

Kraft, the maker of food and beverage products, has agreed to acquire those businesses of the French dairy products and beverage group, although Danone’s biscuits businesses in Latin America (Bagley) and India (Britannia) are excluded, as is its biscuits business in some European markets, which will be run by current management. The biscuit business acquired in France will not be closed until after three years from signing of the agreement, according to its terms. Kraft is expected to finance the transaction by borrowing the external debt. Danone will use funds generated from the transaction for research and internal development, and will concentrate and expand its business related to fresh dairy products and spring-water based beverages and mineral water. Obtaining Danone’s biscuits and cereal businesses in China, Russia, Poland, Indonesia, Malaysia, and elsewhere will give Kraft operational and production synergies. The transaction is subject to the approval from European competition authorities and other regulatory authorities, customary closing conditions, and Danone’s work council, and is expected to close by year-end.
Seller financial advisor: Citigroup; Lazard
Bidder financial advisor: Goldman Sachs
Seller legal advisor: Bredin Prat (Advising seller)
Bidder legal advisor: Clifford Chance; Sutherland Asbill & Brennan; Arnold & Porter

The Carlyle Group LLC to buy Manor Care Inc. for $5.82 billion

The definitive agreement calls for a $67-a-share price for the Toledo, Ohio-based provider of short-term post-acute and long-term care. Washington, D.C.-based private-equity concern Carlyle is paying a premium of 2.6 percent. The transaction will be financed through a combination of commercial mortgage-backed securities, other debt financing, and equity provided by Carlyle, and is expected to close in the fourth quarter.
Seller financial advisor: Citigroup; JPMorgan
Bidder financial advisor: Banc of America Securities; Credit Suisse; Morgan Stanley
Seller legal advisor: Cravath Swaine & Moore
Bidder legal advisor: Latham & Watkins

Teck Cominco to buy AUR Resources for $3.59 billion

Holders of AUR Resources, an international mining company that acquires, explores, develops and mines mineral properties, will receive Canadian-$30.75 in cash 0.2187 of a Teck Cominco Class B share for each AUR share at full pro-ration, for a total of about Canadian-$41, a premium of 29 percent. Maximum cash to be paid is Canadian-$3.1 billion, with the maximum number of shares to be issued about 22 million. The offer should commence by July 18 and be open for acceptance for at least 35 days. The transaction will be financed with cash reserves on hand.
Seller financial advisor: CIBC World Markets
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Heenan Blaikie; Troutman Sanders
Bidder legal advisor: Lang Michener; Paul Weiss Rifkind Wharton & Garrison

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