Deals: We’re Already Topping $1 Trillion

In our M&A Roundup for the week ending June 29, even before including Saturday's BCE buyout, a mix of LBOs and foreign purchases of U.S. companies lead to the benchmark.

The year’s North American dealmaking edged over $1 trillion last week, 10 weeks ahead of when that mark was reached in 2006. At this point last year, there had been $682 billion in M&A, on the way to a final year-end tally of $1.47 trillion.

Last week’s $40.65-billion total did not include the biggest private-equity deal of the year so far: the $32.6-billion buyout of Canadian telecommunications giant BCE Inc. It was announced Saturday, falling just outside our “official” June 29 week.

The top ten transactions featured a familiar mix of foreign companies purchasing U.S. assets, and mid-sized private-equity buyouts, according to data provided to by mergermarket. Leading the top ten was Basell NV of the Netherlands purchasing Salt Lake City chemical company Huntsman Corp. for $9.15 billion, followed by Madrid-based energy concern Iberdrola SA buying Energy East Corp. for $8.51 billion. Holding company Energy East, of New Gloucester, Maine, has interests in transmission, distribution, and generation operations, along with natural gas businesses in the Northeast.

The leading private equity deal was the $5.57-billion purchase of Allison Transmission from General Motors Corp. by Carlyle Group LLC and Onex Partners LP, which helped buyout activity account for $380.2 billion of the year-to-date total.

Basell NV to buy Huntsman for $9.15 billion

The definitive agreement, unanimously approved by both boards, calls for Huntsman holders to get $25.25 a share, a premium of 33.6% for the maker and marketer of differentiated, inorganic, and commodity chemical products. Basell produces polypropylene and advanced polyolefins products, supplies polyethylene and catalysts, and develops and licenses polypropylene and polyethylene processes. Entities controlled by Matlin Paterson and the Huntsman family, who collectively own 57% of Huntsman’s common stock, have agreed to approve the transaction, expected to close in the fourth quarter. Conditions: HSR (USA), EC (Europe), and Huntsman shareholder approval. Expected
Seller financial advisor: Merrill Lynch; Cowen & Co.
Bidder financial advisor: Citigroup
Seller legal advisor: Vinson & Elkins; Sherman & Sterling

Bidder legal advisor: Skadden Arps Slate Meagher & Flom; Curtis, Mallet-Prevost, Colt & Mosle

Iberdrola to buy Energy East for $8.5 billion

Both boards have approved the definitive agreement, offering $28.50 a share, for a premium of 20.9 percent. Regulatory approvals must be received, and Iberdrola will analyze different financing alternatives for the transaction. After the close, expected in 2008, Energy East’s utility subsidiaries will continue to operate under their current names (Berkshire Gas Co., Central Maine Power Co., Connecticut Natural Gas Corp., New York State Electric & Gas Corp., Rochester Gas and Electric Corp., and Southern Connecticut Gas Co.)
Seller financial advisor: Greenhill & Co; JPMorgan
Bidder financial advisor: ABN AMRO; Banc of America Securities
Seller legal advisor: Davis Polk & Wardwell (Advising Greenhill & Co and JPMorgan); LeBoeuf, Lamb, Greene & MacRae

Bidder legal advisor: Latham & Watkins; Uria Menendez


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