Deals: Relativity Matters

In our M&A roundup for the period ended Aug. 10, two of the top buyers already have an interest in the targets, while private equity accounts for the third.

The number of North American deals grew last week — to 52 from 44 — but the volume of transactions plunged, as multibillion-dollar deals nearly vanished from the books. And with strategic dealmaking hobbled, the leading purchases were among related companies or by private equity players.

The largest transaction was Nationwide Mutual Insurance’s $2.41-billion offer for the insurance holding company Nationwide Financial Services, while the only other deal worth $1 billion was the purchase by private equity companies Carlyle Group LLC and Riverstone Holdings LLC of Canada’s Gibson Energy from London-based Hunting plc. Sony Corp. of America’s purchase of a half-stake in Sony BMG Music Entertainment from Bertelsmann AG for $900 million did come close, however.

The $7.05 billion in deal volume marked a sharp fall-off from the prior week’s nearly $20-billion, according to data on the top 10 North American transactions provided to CFO.com by mergermarket.

Year-to-date deal value is now $622.84 billion, based on 2,334 transactions through Aug. 10. That’s down from $1.23 trillion based on 3,239 transactions.

Nationwide Mutual Insurance to buy Nationwide Financial Services for $2.41 billion

Nationwide Financial definitively agreed to be acquired by Nationwide Mutual, with both boards approving the deal at $52.25 per Class A share, a premium of 38 percent. Both companies are based in Columbus, Ohio, with Nationwide Financial being the holding company for life insurance and other firms comprising the domestic life insurance and retirement savings operations of the Nationwide group. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Lazard
Bidder financial advisor: UBS; Goldman Sachs
Seller legal advisor: Dewey & LeBoeuf; Sidley Austin
Bidder legal advisor: Jones Day; (Skadden Arps Slate Meagher & Flom advising UBS, Goldman Sachs)

Riverstone Holdings LLC and The Carlyle Group LLC to buy Gibson Energy Ltd from Hunting plc for $1.07 billion

Washington, D.C. and New York City-based private equity firms Riverstone Holdings and Carlyle Group LLC agreed to acquire Calgary, Alberta-based Gibson Energy from London-based Hunting plc. The price exclude a working capital payment of $165.06 million. The acquisition, financed by UBS will be voted on by Hunting’s shareholders approval on Aug. 26.
Seller financial advisor: Close Brothers; ABN AMRO; Simmons & Company International
Bidder financial advisor: Not available
Seller legal advisor: CMS Cameron McKenna
Bidder legal advisor: Not available

Sony Corp. of America to buy a 50 percent stake in Sony BMG Music Entertainment from Bertelsmann AG for $900 million

Tokyo-based Sony, the media and electronics company, agreed to acquire the 50 percent of New York City-based Sony BMG Music Entertainment that it doesn’t own. Seller Bertelsmann is a Guetersloh, Germany-based publishing and broadcasting company.
Seller financial advisor: JPMorgan
Bidder financial advisor: Citigroup
Seller legal advisor: Davis Polk & Wardwell
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton; Paul Weiss Rifkind Wharton & Garrison

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