On November 7, Oracle completed its proposed acquisition of NetSuite, a cloud storage company. Oracle had initially launched its cash-for-stock tender offer in July, proposing to acquire NetSuite for $109 per share, in a deal valued at $9.3 billion.
Oracle Set to Acquire NetSuite
Will Healthcare Mergers Feel the Trump Effect?
The election of Donald Trump has shone a new light on healthcare insurance mega-mergers currently being challenged by the Obama administration. With the Anthem-Cigna trial in motion, and Aetna-Humana soon to follow, the future of health care insurance is up in the air. If successful, these two mergers will significantly reshape the market, reducing the five major health insurers to just three.
Potential Issues of Self-dealing in SolarCity and Tesla Merger
Within the last decade, tech companies have risen from obscurity to multibillion dollar enterprises. Names like Microsoft, Apple, and Facebook are more prevalent than ever. Along with these companies are their larger than life CEOs: Bill Gates, Mark Zuckerberg, and the late Steve Jobs.
“Brexit” Concerns Could Prompt M&A Migration
International banks have traditionally concentrated their European dealmakers in London, but after the United Kingdom’s vote to leave the European Union (“Brexit”), it is unclear whether and how much transactional activity will shift out of the U.K. The German deal market is heating up and banks are subtly shifting bankers to satellite offices in Frankfurt, indicating that Germany is in a position to absorb British banking activity.
EU Opens In-Depth Antitrust Review of Merger between London Stock Exchange and Deutsche Börse
European antitrust regulators announced on September 28, 2016 that they would open an in-depth investigation into the proposed all-stock merger between the London Stock Exchange (LSE) and Deutsche Börse (DB). If the merger goes ahead, LSE shareholders will own 45.6% of the new holding company with the rest being held by DB shareholders. The $28 billion deal was first discussed in May 2000, but the parties didn’t reach a final agreement until March of this year. Shareholders from both exchanges approved the deal in July. The deal is expected to produce £215 million in annual cost savings over five years.
Congress Urges Stricter Scrutiny of Chinese Capital in Hollywood
Lawmakers are urging a tougher stance on Chinese acquisitions in certain industries involving national security, but with a twist: now, Hollywood is in focus.
Could a Viacom-CBS Reunification Be Imminent?
In 1967, Sumner Redstone took over National Amusements, Inc., a family movie theater chain headquartered in Dedham, Massachusetts. Today, the company owns an 80 percent stake in CBS and Viacom, two of America’s leading media and entertainment conglomerates. Mr. Redstone, who is now 93 years old and rumored to be in failing health, has relinquished most of the control of the company to his daughter, Shari Redstone. In May of 2016, Ms. Redstone removed Phillipe Dauman and George Abrams, two long-time Redstone confidants, from Mr. Redstone’s trust in what some characterized as a “shameful” power play by Ms. Redstone. This marked the beginning of an unpleasant legal battle in which members of the Redstone family, along with longtime friends and advisors, challenged the patriarch’s mental capacity.
Rumors of Disney’s Next Big Acquisition
The Walt Disney Company is known for its prodigious business acumen and high-profile acquisitions. Last year, Disney’s annual profit came in at $8.4 billion, an incredible climb from $3.4 billion in 2006. Since Robert A. Iger began his role as chief executive in 2005, the company acquired Pixar, Marvel Entertainment, and Lucasfilm. In the last year, Disney released four movies, which generated $1 billion in global ticket sales, and this past June, Disney opened the $5.5 billion Shanghai Disneyland. These projects led to an increased share price of $31 in 2006 to $122 in August 2015.
Halliburton-Baker Hughes Merger Hits Antitrust Roadblock
On April 6, 2016, the United States Justice Department announced the filing of an antitrust suit in the U.S. District Court for the District of Delaware to block the proposed merger between Halliburton and Baker Hughes—citing its potential to “eliminate vital competition, skew energy markets and harm American consumers.” Originally brokered in 2014, the $35 billion deal would bring together the second and third largest oil field service firms in the world. Attorney General Loretta Lynch has voiced concerns that this merger of two of the top three firms would serve to create “non-competitive duopolies” in twenty-three separate markets throughout the United States.
New Treasury Rules End Pfizer-Allergan Merger Plans
On April 6, 2016, U.S. pharmaceutical firm Pfizer abandoned its $160 billion planned merger with its Irish counterpart Allergan. The two companies called off what would have been the largest merger in the pharmaceutical sector after the U.S. Treasury announced new rules restricting tax-avoiding “inversions.”
An inversion is a corporate strategy to lower a company’s tax burden by moving its U.S. corporate headquarters to another country with lower corporate tax rates. The U.S. corporate tax rate is currently 35 percent—the highest among developing countries. Ireland, by comparison, has a tax rate of only 12.5 percent. Most U.S. corporations invert overseas by merging with a smaller foreign company and moving overseas, which is exactly what New York-based Pfizer sought in merging with Dublin-based Allergan. Pfizer stood to save over $35 billion in taxes by relocating to Ireland.