Deals: Fertilizer, Roller Coasters, and Gold

In our M&A Roundup for the week ended March 22, a diverse lot of billion-dollar deals helps keep the totals respectable — though far short of the prior "Merck Week."

Three billion-dollar transactions — in a diverse range of agricultural, theme-park, and gold-mining businesses — kept North American dealmaking at a respectable volume of $4.89 billion last week.

Leading the merger-and-acquisition scene was Calgary-based Agrium Inc.’s hostile bid for fertilizer-products company CF Industries Holdings Inc., weighing in at $3.48 billion. It was followed by Goldman Sachs’s $1.41-billion tender offer to take majority control of Osaka-based theme park Universal Studios Japan. The third-largest deal was hedge fund Paulson & Co.’s $1.28-billion purchase of 11.3 percent of Johannesberg’s AngloGold Ashanti Ltd., according to data provided to CFO.com by mergermarket.

While last week’s 26 deals were two more than the prior week, the more recent week’s volume was a barely one-tenth the $46.84 billion recorded in the earlier period. That earlier week included the $43.2-billion Merck purchase of Schering-Plough, which tended to skew the totals.

In the year to date, 461 transactions now have been worth $192.42 billion. Again because of the larger number of monster deals this year, the value of this year’s dealmaking — $192.42 billion — sharply exceeds the $132.65 billion that was recorded at this time of 2008.

Agrium Inc. to buy CF Industries Holdings Inc. for $3.48 billion

Agrium, a Calgary, Canada-based producer and marketer of agricultural nutrients and industrial products, made an unsolicited proposal to acquire the shares of CF Industries, a Deerfield, Ill.-based investment holding company with interests in fertilizer products. As a condition of the tender offer, CF will have to cancel its own tender offer for another firm, Terra Industries. Terms of the Agrium-CFO bid call for an Agrium share and $31.70 per share of CF to be exchanged for each CF share. The $72-a-share value offers a premium of 29.5 percent. The implied equity valued of the transaction is $3.75 billion. Agrium says the proposal is not subject to a financing condition, given that the company has sufficient cash resources and committed financing underwritten by Royal Bank of Canada and the Bank of Nova Scotia.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: RBC Capital Markets; Scotia Capital
Seller legal advisor: Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Blake, Cassels & Graydon; Paul Weiss Rifkind Wharton & Garrison; Shearman & Sterling (Advising RBC Capital Markets)

Goldman Sachs to buy USJ Co Ltd. for $1.41 billion

New York City-based investment banking, securities, and investment management firm Goldman made a cash tender offer to acquire Universal Studios Japan Co. Ltd., the Osaka, Japan-based theme park. Goldman will establish a joint venture with Crane Holdings, forming SG Investment, to pay $521.52 in cash per USJ share, a 22.85-percent premium. The transaction will be funded by a syndicated loan from Sumitomo Mitsui Bank Corp, DBJ, Bank of Tokyo-Mitsubishi UFJ, Mizuho Corp. Bank, Nomura Capital, Sumitomo Trust, GE Financial Services, Calyon Bank, and Chuo Mitsui Trust and Banking. The transaction is subject to a minimum acceptance of 80.86 percent of the shares. The transaction is reported to be intended to increase Goldman’s control of USJ to 61-percent from the current 41 percent.
Seller financial advisor: Daiwa Securities Group
Bidder financial advisor: Goldman Sachs; Nomura Securities
Seller legal advisor: Nishimura & Asahi
Bidder legal advisor: Not Available

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