Back From Vacation: What Happened Since I Left?

back from vacation

The markets never sleep, and while I was away on a (well deserved!) trip, a few things worth mentioning happened in the M&A space

Summer.. always a good time to be checked out of the financial world. But that I’m taking a break doesn’t mean nothing is happening, and before publishing about a new deal hopefully early next week, I want to quickly review what’s happened recently in our little merger arbitrage business now that I’m back from vacation.

With no order of importance or chronological order:

  • The Megabrew is happening! The ABInbev/SABMiller transaction has been approved by the shareholders of both companies and will close shortly, with the shares of the combined entity to start trading in Brussels on October 11, 2016 (source: Fortune).
  • Bayer and Monsanto got married! After months of negotiation (I first wrote on this merger back in May 2016), the pair finally agreed to put the deal to bed, for a final price of US$127.5/share, valuing Monsanto at US$57 billion. For those of you who’ve asked me my thoughts on this merger and whether I’ll invest, the answer is maybe. As reported by the WSJ article, the deal is expected to close by late 2017 and needs to receive clearance from no less than 30 regulatory agencies… there is a reason for the 25% spread! So if I do invest, it won’t be now as I believe that there are better short term opportunities, even if they’re less high profile (a factor that should never be taken into account anyways).
  • Qualcomm is in talks of acquiring NXP! In the latest sign of consolidation in the technology industry, the transaction will be worth more than US$30bn the WSJ reports
  • Salesforce is bothering Microsoft! (and myself) by urging the European Union regulator to take a close look at the LinkedIn acquisition. In my latest article on the topic, I seem to have been a bit too optimistic regarding the timing of the close of the transaction. I’m now looking at a close in the next 2 months assuming nothing major results from Salesforce’s allegations.
  • Twitter is in play! Reports have emerged that Salesforce, Disney and Google among others are looking at acquiring the struggling platform (source: Fortune). The stock shot up 20% in response to speculations that a deal will happen. A transaction could easily fetch US$20bn+ if the bidding gets competitive.

    In others, quieter (but nonetheless important) news, a couple of updates on deals I recommended to invest in:
  • The First Marblehead transaction has closed! (press release here and original article here)
  • Lexmark received the last major regulatory approval needed to consummate the deal, sending the stock up ~14% in a single day. Apparently the market was more dubious than I was about the success of this one (read the original article here).

Don’t forget to check the blog next week for the latest arbitrage opportunity coming out!

Disclosure: Long AbInBev, SABMiller, LinkedIn, Disney, Lexmark.

This article expresses an opinion and the author does not receive compensation for it and has no business relationship with any company whose stock is mentioned in this article; do your own due diligence before making investment decisions.

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