Deals: A Rousing Farewell to 2007?

In our M&A Roundup for the week ended Dec. 16, there's a distinct pick-up, and a harbinger of even bigger things to come.

North America’s merger and acquisition volume nearly doubled last week, led by two purchases of U.S. pharmaceuticals companies — one by a Japanese pharma products maker and one by a UK-based cleaning products concern.

Leading the way in the top 10 deals of the week were the $3.4-billion sale of MGI Pharma Inc. of Bloomington, Minn., to Tokyo-based Eisai Co. Ltd. The second-largest transaction was Reckitt Benckiser Plc’s deal to buy Adams Respiratory Therapeutics Inc., of Chester, N.J., for $2.10 billion.

The 57 deals that were struck over the seven-day period totaled $14.67 billion, and raised the year-to-date total for North American M&A past $1.51 trillion, compared with $1.42 trillion in the period ending Dec. 16, 2006, according to data provided to CFO.com by mergermarket.

The results did not include two large deals announced early on Monday — Ingersoll-Rand Co.’s purchase of Trane Inc. and the consolidation of oil-and-gas concerns National Oilwell Varco Inc. and Grand Prideco Inc. — which alone top all of last week’s activity. That suggests the possibility of strong year-end strategic dealmaking that could help turn the tide from recent weeks of subpar M&A.

Eisai Co. Ltd. to buy MGI Pharma Inc. for $3.40 billion

MGI Pharma definitively agreed to an acquisition by Eisai, of Tokyo, for $41 a share, a premium of 22.6 percent. MGI, a biopharmaceutical company focused in oncology and acute care, acquires, researches, develops, and commercializes pharmaceutical products. Eisai, which also is engaged in the manufacturing and sale of pharmaceutical products, expect the transaction to significantly strengthen its oncology business and improve its likelihood of meeting revenue and earnings goals. Eisai intends to finance the acquisition through existing internal financial resources and through bank loan financing, and has secured commitment for the debt required to consummate the transaction. The transaction is expected to close in the first quarter of 2008.
Seller financial advisor: Lehman Brothers
Bidder financial advisor: JPMorgan
Seller legal advisor: Hogan & Hartson
Bidder legal advisor: Davis Polk & Wardwell (Advising JPMorgan); and Sullivan & Cromwell

Reckitt Benckiser Plc to buy Adams Respiratory Therapeutics Inc. for $2.10 billion

Adams Respiratory Therapeutics, of Chester, N.J., signed a definitive agreement with Reckitt, of Slough, England, and both boards have recommended the merger for $60 a share, a premium of 37.4 percent. Adams is a specialty pharmaceutical company focused on the late-stage development, commercialization, and marketing of over-the-counter and prescription pharmaceuticals for the treatment of respiratory disorders. Reckitt Benckiser makes and markets branded products in household cleaning and health and personal care, selling through over 60 operating companies into around 180 countries. Reckitt Benckiser will finance the transaction with cash on hand and existing credit facilities. The transaction is expected to close in late January or early February.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Alston & Bird
Bidder legal advisor: Arnold & Porter

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