In the third week of January, only two acquisitions managed to top $100 million in size. And, at $7.11 billion, the total value of deals for the year to date was languishing at a mere 13 percent of the prior year’s $52.86 billion.
But what a difference a week makes. While the number of deals done in 2009 is still less than half last year’s volume, two huge drug deals put this year’s deal values on steroids, far outstripping the same period in 2008. Pfizer’s $67.5 billion acquisition of Wyeth, and Roche Holdings hostile $43.2 billion bid for the 44 percent of Genentech it doesn’t already own brought year-to-date deal values to $119 billion, according to data provided by mergermarket.
Even without the two drug company deals, the week saw a marked improvement, with six other acquisitions topping $100 million, including Newmont Mining’s $990 million deal for a third of the Boddington Gold Mine joint venture owned by AngloGold Ashanti Australia.
Pfizer Inc to buy Wyeth for $67.5 billion
The Madison, New Jersey-based drug company agreed to be acquired by New York City-based Pfizer. Both boards approved the merger at a price of $33 and 0.985 Pfizer shares per Wyeth share, or a value of $50.19 for each Wyeth share. The deal represents a premium of 14.7 percent. The implied equity value of the transaction is approximately $66.8 billion. The transaction can still be scuttled by Pfizer’s funding sources, who have the right to refuse financing if there is a material adverse change with respect to Pfizer. Pfizer is required to maintain the minimum credit rating of A2/A long-term stable/stable and A1/P1 short term affirmed.
Seller financial advisor: Evercore Partners; Morgan Stanley
Bidder financial advisor: Banc of America Securities; Barclays Bank; Citigroup; Goldman Sachs; JPMorgan
Seller legal advisor: Dewey & LeBoeuf (Advising Evercore Partners); Paul Weiss Rifkind Wharton & Garrison (Advising Morgan Stanley); Simpson Thacher & Bartlett; Wachtell Lipton Rosen & Katz
Bidder legal advisor: Cadwalader, Wickersham & Taft
Roche Holding Ltd makes hostile bid for remaining 44 percent stake of Genentech Inc for $43.2 billion
After failing to negotiate a merger, the Basle, Switzerland-based pharmaceuticals company is commencing a tender offer for all outstanding shares of San Francisco-based Genentech. Roche’s original July offer of $89 per Genentech share has been lowered to $86.50. Roche acquired a majority in Genentech in 1990 and currently owns 55.8 percent of all outstanding shares. The new offer of $86.50 per Genentech share represents a premium of 2.9 percent on Genentech’s January 29 closing price, and a premium of 5.7 percent on Genentech’s price on July 18, the day before Roche’s initial offer. The implied equity value of the transaction is approximately $91 billion.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Greenhill & Co
Seller legal advisor: Cravath Swaine & Moore (Advising Goldman Sachs); Latham & Watkins
Bidder legal advisor: Davis Polk & Wardwell; Sullivan & Cromwell (Advising Greenhill & Co)