L'Oreal to pay $1.3B for Valeant skin-care brands

PARIS-- L'Oréal SA plans to buy CeraVe and two other skin-care brands (AcneFree and Ambi) from Valeant Pharmaceuticals Inc. for $1.3 billion, expanding the French cosmetics firm's U.S. presence and deepening its portfolio in a product segment that has become the beauty industry's largest.

• Earlier in the day, Valeant said it would sell its Dendreon Pharmaceuticals unit to closely held Chinese conglomerate Sanpower Group Co. for about $820 million.
• The agreements mark a start to Valeant's efforts to pay down about $30 billion in debt. The Laval, Quebec-based company has been embroiled in scandals about its drugs' high prices and accounting that led to legal and regulatory investigations along with declines in its share price. 
• The three brands have combined annual sales of about $168 million and will become part of L'Oreal's Active Cosmetics Division, alongside La Roche-Posay, Vichy and SkinCeuticals.
• Through Monday, 9 Jan 2017, Valeant's U.S. shares had plunged 94 percent from their 2015 peak, cutting the company's market value to $5.2 billion.

The all-cash deal will give L'Oréal the CeraVe brand, which includes cleansers, moisturizers and healing ointments, as well as the AcneFree and Ambi brands, which distribute a range of acne treatments and skin-care products.

L'Oréal, one of the world's leading cosmetics makers, said the three brands have an annualized combined revenue of around $168 million.

CeraVe offers a range of skin-care products including cleansers, moisturizers and sunscreens, as well as a baby line. It is one of the fastest-growing skin-care brands in the U.S., averaging 20% annual growth over the past two years, L'Oréal said.

L'Oréal said the three brands would stand alongside the likes of Vichy, La Roche-Posay and SkinCeuticals in its Active Cosmetics division, which has been growing in recent quarters, boosted by strong performances in North America and Latin America.

For Valeant, the sale is part of new Valeant Chief Executive Joseph Papa's efforts to focus the company on its key franchises by selling noncore assets or milking them for cash to pay down $30 billion in debt.

Nasdaq to Buy Options Exchange Operator ISE for $1.1 Billion

• Just as the London Stock Exchange and Deutsche Börse Group are in a tango over a potential merger, Deutsche Börse officials take a side step and agree to sell International Securities Exchange Holdings, Inc. (ISE) to Nasdaq for a total cash consideration of $1.1 billion
• ISE’s exchanges serve as the venues for more than 15% of trading in U.S. options

Nasdaq Inc. agreed to buy options-exchange operator International Securities Exchange for $1.1 billion, in a deal that gives it control of nearly 40% of the U.S. options market.

Nasdaq, which is buying ISE from Deutsche Börse Group, expects to complete the deal in the second half of 2016 and fund it with a mix of debt and cash on hand.

ISE operates three electronic options exchanges—ISE, ISE Gemini and ISE Mercury—which serve as the venues for more than 15% of trading in U.S. options. Nasdaq operates Nasdaq PHLX, Nasdaq Options Market and Nasdaq BX Options.

As part of the transaction, Nasdaq will gain an additional 20% stake in the Options Clearing Corp., for a total position of 40% in the world’s largest equity derivatives clearing corporation.

Options trading has grown more competitive in recent years. Last year, BATS Global Markets Inc. launched EDGX options, and MIAX Options Exchange struck an equity rights deal with several major firms, predicting the move would triple its market share.

The London Stock Exchange has said it is in advanced talks with Deutsche Börse about a so-called merger of equals that would value the combined company at about $28 billion. Intercontinental Exchange Inc. and CME Group Inc. are also considering bids for the LSE.

For its part, Nasdaq has transformed from a U.S.-focused exchange operator to a global business that includes markets in the U.S., Canada and the Nordic region, as well as a suite of businesses that include investor and public relations, technology and data.

Keurig Green Mountain to be taken private for $13.9 bln

Dec 7 (Reuters) - Keurig Green Mountain Inc, the maker of K-Cup single-serve coffee pods, said on Monday it would be bought by an investor group led by Germany's JAB Holding Co (JAB) for about $13.9 billion, creating a global coffee giant.

This is the latest in a string of coffee deals by JAB as it seeks to become a formidable competitor to Nestle SA, which operates the world's biggest coffee business.

JAB formed a joint venture in July called Jacobs Douwe Egberts - now the largest pure-play coffee company - by combining its D.E. Master Blenders 1753 business with the coffee business of Mondelez International Inc.

JAB, the investment vehicle of the billionaire Reimann family of Germany, bought coffee companies Caribou Coffee Co and Peet's Coffee & Tea in 2012.

JAB's $92.00 per share cash offer represents a 78 percent premium to Keurig's Friday close. Keurig's shares were trading at $90.56 before the opening bell on Monday.

Coca-Cola Co, Keurig's biggest single shareholder, said it was supportive of the deal. As of Dec. 6, Coke had a 17.4 percent stake in the Vermont-based company, valuing its holding at about $2.4 billion at the offer price.

JAB is acquiring Keurig in partnership with investors who are already shareholders in Jacobs Douwe Egberts, including Mondelez and entities affiliated with BDT Capital Partners.

JAB's other holdings include controlling stakes in cosmetics company Coty Inc and luxury goods makers Jimmy Choo .

The deal is expected to close in the first quarter of 2016.

BofA Merrill Lynch and Credit Suisse provided fairness opinions to Keurig Green Mountain.

Up to Friday's close, Keurig's shares had fallen more than 60 percent this year.

*****

JAB, backed by German billionaire Reimann family, also has invested in a variety of consumer-goods companies, such as cosmetics giant Coty Inc. and Durex condom maker Reckitt Benckiser Group Plc. Four of the Reimanns each have a net worth of about $2.9 billion, according to the Bloomberg Billionaires Index.

Kroger's (NYSE:KR) agrees to buy Roundy's (NYSE:RNDY)

Supermarket giant Kroger's (NYSE:KR) agreement to buy Roundy's (NYSE:RNDY) would expand Kroger's reach in the Midwest, giving it a footprint in Milwaukee, Madison, northern Wisconsin and stores in Chicago.

Cincinnati-based Kroger would pay $3.60 per share cash in a deal valued at about $178 million, or $800 million including Roundy's debt. Roundy's has 151 stores and 101 pharmacies. Together, Kroger and Roundy's will operate 2,774 supermarkets.

Kroger, with annual sales of about $109 billion, is the parent of its namesake stores, as well as Ralphs, Kwik Shop, Fred Meyer, Food 4 Less and other chains.

Among Kroger's nearest rivals are natural and organic foods chain Whole Foods Market (NASDAQ:WFM) with roughly $15.4 billion annual sales, and discount chain Supervalu (NYSE:SVU), with just over $18 billion a year revenue. But Kroger is getting increasing competition from other quarters.

World's largest retailer Wal-Mart Stores (NYSE:WMT) and big-box discounter Target (NYSE:TGT) have beefed up their food departments in recent years. Amazon.com (NASDAQ:AMZN) and other retailers sell groceries online and Amazon has a home delivery service.

Mariano's CEO Robert Mariano

The Cincinnati grocery giant is buying Milwaukee-based Roundy's. But Mariano's CEO Robert Mariano says "nothing's going to change in our stores."

AB InBev's $104.2 billion takeover of SABMiller

SABMiller’s board has accepted the terms for the takeover worth $104.2 billion
Anheuser-Busch InBev NV (BUD) sweetened its offer for SABMiller Plc (SBMRY) to $104.2 billion … and that was good enough for the beer firm to accept the deal. But now the long, arduous process of trying to get regulatory and antitrust approval around the world begins. It could take a year or more to go through the steps, and no conclusion is assured.

• Deal creates world’s largest brewer, worth $275bn (180bn pounds), with nearly 30% market share, nearly three times its closest rival, Heineken NV
• It is the fourth-largest takeover in history and the largest this year, according to Dealogic. 
• The combined companies would generate $64 billion in revenue.
• Beer consumption in developed markets is expected to decline this year for the first time in 30 years. 
• The bulk of global growth will come from Africa, where volumes are expected to rise by 2.6%.

Anheuser-Busch InBev, abbreviated as AB InBev, is a multinational beverage and brewing company headquartered in Leuven, Belgium. It is the world's largest brewer and has a 25% global market share. AB InBev was formed through successive mergers of three international brewing groups: Interbrew from Belgium, AmBev from Brazil, and Anheuser-Busch from the United States. It has 16 brands that individually generate over 1 billion USD per year in revenue out of a portfolio of more than 200 brands (2014). This portfolio includes global brands Budweiser, Corona and Stella Artois, international brands Beck's, Hoegaarden and Leffe and local brands such as Bud Light, Skol, Brahma, Antarctica, Quilmes, Victoria, Modelo Especial, Michelob Ultra, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske and Jupiler. Total revenue for all 200 AB InBev brands in 2014 was over 47 billion USD.

SABMiller, which started as South African Breweries, has operations across Africa, giving AB InBev a lead on the fast-growing continent. It also offers AB InBev access to fast-growing markets in Latin America like Peru and Colombia, which helped deliver a 6% increase in beverage volume over the first half of the year.

• SABMiller produces Coca-Cola Co. products in at least 25 markets.
• Tobacco company Altria Group Inc (NYSE:MO) is the biggest shareholder of SABMiller with a 27% stake in the company. It was in favor of the takeover since AB InBev approached SABMiller with the offer of 42.15 pounds per share. 
• SABMiller’s second largest shareholder on the other hand, the Colombian Santo Domingo family, which holds a 14% stake and two board seats has always opposed the tie-up proposal.
• The Santo Domingo family’s holdings are valued at $14.8 billion, according to the Bloomberg Billionaire’s Index.  That fortune is largely controlled by 38-year-old Harvard-educated Alejandro Santo Domingo.  Mr. Santo Domingo is also managing director of New York-based venture-capital firm Quadrant Capital Advisors Inc.

After being rejected four times, AB InBev made the bid to pay SABMiller 44 pounds (around $68) per share in cash, and also gave the option of a cash and share mix, which was set at a discount and confined to 41% of SABMiller’s shares.

Alejandro Santo Domingo with British aristocrat Lady Charlotte Wellesley last year.

Pet-supply retailer PetSmart to be acquired by BC Partners Group

PetSmart Inc. agreed to be bought by a group led by BC Partners Inc. for about $8.25 billion, in the largest private-equity buyout of the year.

• The group agreed to pay $83 a share in cash, a premium of about 6.9% to Friday's closing price of $77.67.
• BC Partners is a British private equity firm and was founded in 1986.
• Bearish traders have also been piling into PetSmart this year. About 15% of the shares outstanding have been sold short, up from about 7% at the end of 2013, according to Markit data. Companies in the S&P 500 Index have an average short interest ratio of 2.2 percent.

Ireland-based Actavis (ACT) to buy Botox maker Allergan (AGN) for $66B; Valeant walks

(Reuters) - Botox maker Allergan Inc on Monday accepted a $66 billion takeover bid from Actavis Plc, ending a seven-month hostile pursuit by activist investor William Ackman and Valeant Pharmaceuticals International Inc.

• Ackman (Pershing Square) disclosed in late April a nearly 10 percent stake in the drugmaker and plans to bid for the company together with Valeant.
• The new company will operate from both California, where Allergan is based, and New Jersey. Its tax rate will be 15 percent compared with Allergan's current rate of about 26 percent.
• Actavis appears poised to make its biggest deal ever, and the biggest acquisition in a year full of big deals, eclipsing the $45 billion Comcast takeover of Time Warner Cable and AT&T’s $48.5 billion purchase of DirecTV. It would be the third-largest health care deal ever in the United States, according to Standard & Poor’s Capital IQ.
• Actavis was until recently based in Parsippany, N.J. But last year it agreed to acquire an Irish drug maker, Warner Chilcott, and relocate its headquarters abroad, striking one of the first big so-called inversions.
• Actavis already took advantage of its newfound financial flexibility as an Irish company this year when it acquired Forest Laboratories.
• Combining Actavis and Allergan will create one of the 10 largest global drug makers, with about $23 billion in revenues expected next year. 
• The deal will combine Allergan’s blockbuster product, Botox, with a suite of Actavis drugs in areas such as women’s health and dermatology.
• Despite losing out on his bid to help acquire the company, Mr. Ackman’s fund will reap a profit of $2.6 billion on its 9.7 percent stake in Allergan. It will share 15 percent of that, or about $389 million, with Valeant.

Dublin-based Actavis offered $219 per share in cash and stock, amounting to billions more than Canada's Valeant was prepared to pay. Valeant said it would walk away from its Allergan campaign shortly after the deal was announced. Ackman was not available for comment.

The deal marks a surprise win for Allergan, which had fought the Valeant-Pershing alliance in court and among shareholders in one of the healthcare sector's most complex takeover efforts.

Allergan shares rose 5.3 percent to close at $209.20. Actavis gained 1.7 percent to $247.94.

AGN monthly chart

Allergan had argued that the Valeant cash-and-stock offer, most recently worth about $54 billion, would hurt its shareholders, given the Canadian drugmaker's history of cutting research and development spending at companies it acquires.

Besides the higher price tag, the Actavis deal came with only $400 million in R&D cuts for Allergan, far less than the $900 million decrease that Valeant had proposed, the companies said on a conference call with investors.

Actavis’ approach may help the two companies integrate their operations and ensure some of Allergan's promising experimental eye treatments for macular degeneration and glaucoma remain in the pipeline.

"If these bets turn out well, Actavis will be seen as a better call," said Morningstar analyst Michael Waterhouse.

Ackman in late April disclosed a nearly 10 percent stake in Allergan and plans to bid for the company together with Valeant. Despite losing his takeover target, Ackman's Pershing Square will earn at least $2.3 billion from Allergan's buyout by Actavis.

The $18 billion hedge fund has roughly 30 percent of its capital invested in Allergan, whose share price has nearly doubled from the $126.54 it paid earlier this year.

Valeant, meanwhile, may find new acquisition targets more willing to push back on its overtures, some of its investors said.

FRIENDLY APPROACH

Actavis Chief Executive Officer Brent Saunders said in an interview that he had reached out to Allergan CEO David Pyott many times during the Valeant-Ackman campaign to express his interest in a combination.

"As he was in discussions, or the throes of battle, with Valeant and Pershing Square, we would connect from time to time," Saunders said, "and I would let him know that we were a friend and we thought it made sense - from 10,000 feet - to combine the businesses."

But talks with Actavis did not begin in earnest until a few weeks ago. Until then, Pyott had publicly fought to keep his company independent and told investors that Allergan was working on acquisitions that would pay off.

Sources familiar with the matter told Reuters that they included discussions about a more than $10 billion deal for Salix Pharmaceuticals that did not materialize.

Allergan also sued Valeant and Ackman, saying that when the hedge fund teamed up with the drugmaker before it made the joint April offer, it broke insider trading rules.

Ackman and Valeant fought back with a proxy battle, seeking to replace Allergan board members and initiating a special shareholder meeting for Dec. 18 to compel the company to negotiate.

Under the buyout deal, Actavis will lead a combined company with $23 billion in revenue from Allergan's ophthalmology, neurosciences, and dermatology business and Actavis' gastroenterology and women's health franchises. In the last two years, Actavis has purchased Forest Laboratories, which Saunders ran, and Warner Chilcott, which enabled it to move headquarters to Dublin.

Actavis said it expected $1.8 billion in savings, on top of the $475 million in cuts that Allergan has already made this year. Valeant planned on savings of about $2.7 billion.

The new company will operate from both California, where Allergan is based, and New Jersey. Its tax rate will be 15 percent compared with Allergan's current rate of about 26 percent.

Actavis was advised by JPMorgan and law firm Cleary Gottlieb Steen & Hamilton. JPMorgan, Mizuho Bank and Wells Fargo provided the deal financing.

Allergan was advised by Goldman Sachs & Co and BofA Merrill Lynch as well as law firms Latham & Watkins, Richards, Layton & Finger and Wachtell Lipton Rosen & Katz.

Russian firm acquires iconic American brewing company Pabst Blue Ribbon

Russian firm Oasis Beverages announced this week that it will be acquiring famed American brewery Pabst Blue Ribbon — 170 years after the company was first established in Milwaukee.

“Pabst Blue Ribbon is the quintessential American brand — it represents individualism, egalitarianism and freedom of expression — all the things that make this country great,” said Eugene Kashper, chair of Oasis Beverages, in a statement.

“The opportunity to work with the company’s treasure trove of iconic brands, some of which I started my career selling, is a dream come true.”

The terms of the transaction have yet to be disclosed, according to the New York Times.

However, the chair of Russia’s largest independent brewery noted the company would continue to be based out of Los Angeles. American private-equity firm TSG Consumer Partners will take a minority stake in the company as well.

Besides the enterprise’s iconic namesake beer that has succeeded in capturing the heart of hipsters worldwide, the Pabst Brewing Company is home to myriad iconic American brands including Lone Star, Schlitz and Old Milwaukee.

A 1911 advertisement showing a blue ribbon tied around the bottle

TreeHouse Foods to aquire snack firm Flagstone Foods for $860 million

(Bloomberg) — TreeHouse Foods Inc., which makes private-label foods for retailers, agreed to buy Flagstone Foods for $860 million to expand in healthy snacks such as dried fruits.

The all-cash deal will add 24 cents to 28 cents in the first full year after completion, Oak Brook, Illinois-based TreeHouse said in a statement today. The final price to be paid to private-equity firm Gryphon Investors and other shareholders is subject to an adjustment of working capital, TreeHouse said.

St. Paul, Minnesota-based Flagstone holds the No. 1 private-label position in the trail mix and dried fruit categories and generated $697 million in sales for the year ended Dec. 28, TreeHouse said. TreeHouse has acquired at least six food companies in the past four years to add products including soups and broths, according to data compiled by Bloomberg.

Gryphon formed Flagstone in November 2010 when it acquired private label trail mix and nuts company Ann's House of Nuts and private label dried fruit maker American Importing Co. and combined them.
TreeHouse makes non-dairy powdered creamers and sweeteners, specialty teas and cereals.

Operating companies

Amport Foods

Minneapolis, MN

Prior to Gryphon Investors ownership, Amport Foods was a privately held, 3rd generation family business.  Founded in 1962 with one product – dates - Amport Foods is now the #1 private brand dried fruit supplier in North America, supplying hundreds of products made with the highest quality ingredients from the U.S. and around the world.  Amport’s cutting-edge processing and packaging facilities are based in Minneapolis, MN, with distribution centers in the East, West, and Central U.S..  Amport is Organic Certified and certified by numerous Fortune 500 Companies.

Visit Amport Foods website >>

Ann's House of Nuts

Robersonville, NC

Founded in 1973 by Ann Zinke as a home business, Ann’s House of Nuts has evolved into the #1 private brand trail mix supplier in the U.S.  With a state-of-the-art production facility in Robersonville, NC, Ann’s House of Nuts is dedicated to providing the highest quality products, innovation, exceptional customer service and value. This is what has built Ann’s House of Nuts into the fast-paced, successful, and rapidly-growing snack food company that it is today.

Visit Ann's House of Nuts website >>

Beam to be sold in $16 billion deal

(Bloomberg) — Beam Inc., whose brands include Jim Beam and Maker's Mark, agreed to be bought by closely held Japanese whiskey and beer maker Suntory Holdings Ltd. in a $16 billion deal to create the world's third-largest premium spirits company.

Investors in the maker of Jim Beam and Canadian Club liquor will get $83.50 in cash per share, Osaka, Japan-based Suntory said today in a statement. That's 25 percent above Beam's closing price Jan. 10.

Beam President and CEO Matt Shattock and Beam's current management will continue to run the business. The company will remain based in north suburban Deerfield, IL, where there are about 400 Beam employees, according to a spokesman.

"Suntory has a highly decentralized model with respect to operations and management," the spokesman wrote in an email to Crain's. "They have advised us they anticipate no major changes to Beam's business platform or workforce."

Suntory, the maker of Yamazaki whiskey and the Premium Malt's beer, is seeking to boost overseas growth as the population in its home country shrinks and ages. The company in 2012 had explored an offer for Beam alongside Diageo PLC.

Beam, whose largest shareholder is activist investor Bill Ackman's hedge fund, in 2012 got 59 percent of its revenue from North America and 21 percent from Europe, the Middle East and Africa.

** monthly **

'STRATEGICALLY, IT MAKES SENSE'
“Strategically, it makes sense for Suntory,” said Trevor Stirling, an analyst at Sanford C. Bernstein & Co. in London. “I'm a little surprised they decided to go it alone, but at the moment there are low yen interest rates.”

The takeover would be the largest overseas acquisition by a Japanese company since Softbank Corp. acquired Sprint Communications Inc. for $21.6 billion last year. Fueled by a strong currency, Japanese companies embarked on an overseas buying spree that peaked with $113.5 billion worth of deals announced in 2012, data compiled by Bloomberg show. With the yen weakening, the value of overseas deals announced last year dropped to about $46 billion, the data show.

The takeover is the largest this year and the sixth-largest ever in the beverages industry, according to data compiled by Bloomberg. Beam was formed during the breakup of Fortune Brands Inc. in 2011 — since then, the company acquired Pinnacle Vodka & Calico Jack Rum Brands in 2012 and sold Select Brands last year.

Mr. Shattock has recently tried to lure drinkers and boost revenue with flavored liquors, such as Pinnacle pumpkin pie vodka and maple bourbon. Net sales in the three months ended Sept. 30 fell 4.5 percent to $598.7 million as results in Beam's Asia Pacific and South American region lagged the company's expectations.

ACKMAN CONTROLS 13 PERCENT
Ackman's New York-based Pershing Square Capital Management LP is Beam's largest shareholder, with a 13 percent stake, according to data compiled by Bloomberg. Ackman had owned a stake in Fortune Brands and pushed the company to break up, leading to the split.

Bloomberg News reported in December 2012 that Suntory had considered making an offer for Beam alongside Diageo, the world's biggest distiller.

While the acquisition has “very little cost synergies,” it allows Suntory greater exposure to the U.S., the world's most profitable spirits market, and to expand Beam's brands in faster-growing Asian markets, Stirling said.

“Suntory has virtually no U.S. presence,” Mark Swartzberg, an analyst at Stifel Financial Corp. in New York, said in a research note today. “This will take their share from less than 1 percent to 11 percent.”
The deal also gives Suntory a major presence in bourbons, he said.

The $16 billion transaction value includes assumption of Beam's outstanding net debt, according to the statement. The company has $2 billion in total debt, data compiled by Bloomberg show.
Suntory Beverage & Food Ltd., the soft-drinks unit of Suntory Holdings, raised about $4 billion last year in Asia's biggest initial public offering.

Tellabs to be acquired for $891 million

California investment firm Marlin Equity Partners agreed to pay $2.45 a share in cash for Naperville, Illinois-based telecom equipment company Tellabs Inc.

Tellabs, founded in 1975, was one of the Chicago areas hottest public companies during the dot-com fueled telecom boom of the late 1990s. But Tellabs, like Motorola Inc., found itself on the losing end of a consolidating market for gear that makes up the backbone of big telecom networks. More recently, Tellabs suffered a blow when CEO Rob Pullen died at age 50 of colon cancer.

monthly chart

"This transaction will deliver to Tellabs stockholders certainty of value and liquidity, immediately upon closing," Tellabs Chairman Vince Tobkin said in a statement issued this morning. "Tellabs' Board of Directors arrived at the decision to enter into a transaction with Marlin after a thorough review of Tellabs' strategic alternatives and after more than 30 potential buyers, both strategic parties and financial sponsors, were contacted as part of a competitive bidding process."

Tellabs co-founder Michael J. Birck, the company's second-biggest shareholder, supports the deal, according to the statement.

Marlin's offer is just a tiny premium to its Friday closing price of $2.35. The recent peak for the stock was about $9 per share in early 2010.

But Tellabs was one of the high-flying stocks of the 1990s, splitting five times between 1994 and 1999, when it topped out at about $70 per share, adjusted for splits.

Annual revenue fell 36 percent between 2010 and 2012, to just over $1 billion, as Tellabs lost ground to rivals. Sales peaked at $3.39 billion in 2000, when the company earned $731 million. Last year, it lost $172 million on $1.05 billion in revenue.

Marlin Equity partner Nick Kaiser said in the statement that "we view Tellabs' business as an ideal opportunity to capitalize on the growth in the telecom network equipment sector." He added that "We are committed to extending Tellabs' market leadership by continuing to make significant investments in research and development, and in providing a superior customer experience."

Address

One Tellabs Center, 1415 West Diehl Road
NAPERVILLE, IL 60563
United States

Website 

www.tellabs.com

Key stats and ratios

	Q2 (Jun '13)	2012
Net profit margin	-3.68%	-16.31%
Operating margin	-1.93%	-14.89%
EBITD margin	-	1.17%
Return on average assets	-2.03%	-8.84%
Return on average equity	-3.11%	-12.51%
Employees	2,525

NASDAQ OMX to Acquire Market Surveillance System Provider SMARTS

The NASDAQ OMX Group has signed an agreement to acquire SMARTS Group, the technology provider of market surveillance solutions to exchanges, regulators and brokers.

This acquisition is part of NASDAQ OMX's strategy to diversify its commercial technology business and enter the broker surveillance and compliance market, Nasdaq said in a release.

SMARTS will be part of the NASDAQ OMX Market Technology business, which delivers technology to over 70 marketplaces in more than 50 countries.

Under the agreement NASDAQ OMX will acquire 100 percent of the shares in privately held SMARTS Group Holdings. The transaction is expected to be concluded within Q3 2010. Financial terms of the transaction were not disclosed. Marlin & Associates acted as exclusive financial and strategic advisor to SMARTS.

Australia-based SMARTS has set the benchmark for surveillance systems, with the most proven and widely adopted surveillance solutions in the world.

Anna Ewing, CIO of NASDAQ OMX, said: "The acquisition of SMARTS is a strategic fit with NASDAQ OMX's commercial technology business. Efficient surveillance operations are imperative to ensure integrity in today's financial markets, and SMARTS allows us to capitalize on the growing demand for surveillance technology products in exchange, regulator and broker markets worldwide. We are also excited about expanding our presence in Australia and look forward to leveraging SMARTS' center of excellence and innovation in the region."

Dr. Andreas Furche, CEO of SMARTS Group Holdings, said: "We are proud to have been chosen by NASDAQ OMX. This acquisition is recognition of the strength of our solutions, Australian innovation and the talent and professionalism of the SMARTS team.

Being part of NASDAQ OMX provides enormous growth opportunities for SMARTS surveillance technologies and provides us with the direct connection to the U.S. markets that we have been seeking. Moreover, the SMARTS customer base will benefit from the added confidence of working with a world-leading company that has a similar customer base and therefore understands the business and requirements of SMARTS' customers."

Berkshire Hathaway unit to buy CNA's asbestos, pollution liabilities for $2 billion

(Reuters) - A unit of Warren Buffett's Berkshire Hathaway Inc. will take over asbestos and environmental pollution liabilities now held by CNA Financial Corp. in exchange for a $2 billion fee.

CNA, which is 90 percent owned by conglomerate Loews Corp., said Berkshire's National Indemnity Co unit would take over $1.6 billion of net liabilities, retroactive to Jan. 1, and assume responsibility to handle claims.

The agreement has a $4 billion limit, and covers credit risk on third-party reinsurance tied to the liabilities. CNA is also transferring the right to $200 million of receivables.

Thomas Motamed, chief executive officer of Chicago-based CNA, said in a statement that the transaction would "effectively eliminate a significant source of uncertainty" for the nation's seventh-largest commercial insurer.

CNA said it expected to incur a $375 million after-tax loss when the transaction closes later this quarter.

Berkshire and National Indemnity, both based in Omaha, Nebraska, did not immediately return requests for comment.

National Indemnity is overseen by Ajit Jain, whom analysts believe may be one of the top candidates to eventually succeed Buffett as Berkshire's CEO.

Insurance typically accounts for half of Berkshire's results, and the company's size often lets Buffett take on insurance exposure, including to hurricanes and terrorism, in exchange for upfront payments that he can invest elsewhere.

In 2006, Berkshire took on $7.1 billion of claims from the Equitas affiliate of Lloyd's of London, which Buffett said was created to handle asbestos claims and a "tidal wave" of environmental and product claims dating from the 1980s.

Buffett told shareholders in a February 2007 letter that despite uncertainty over the timing and size of potential claims, "Ajit and I think the odds are in our favor."

Asbestos exposure has long been a problem for insurers. While many companies by the mid-1970s had stopped using asbestos for fireproofing and insulation, litigation persists because after-effects can take decades to surface.

In its annual report, CNA said it incurred $155 million of additional asbestos and environmental pollution exposure in 2009, citing larger claims, increased trial activity and changes in case law.

It said trends might worsen because lawyers who once sued companies that are now bankrupt seek out other targets, while court rulings on pollution claims have been "inconsistent."

Berkshire has about 80 operating businesses and tens of billions of dollars of common stock investments. It ended March with $25.67 billion of cash.

Carlyle to Buy Vitamin Maker NBTY for $3.8 Billion

(Bloomberg) -- NBTY Inc., the maker of Solgar nutritional supplements, agreed to be bought by the Carlyle Group for $3.8 billion in the biggest acquisition by a private- equity firm this year.

Carlyle will pay $55 a share in cash, Ronkonkoma, New York- based NBTY said in a statement today. That’s 47 percent more than the closing price of $37.47 yesterday on the New York Stock Exchange. NBTY’s other brands of vitamins and nutritional supplements include Nature’s Bounty, Rexall and MET-Rx.

Private-equity firms, returning to takeovers as economies recover, plan to invest a record $507 billion in cash raised before the collapse, London-based researcher Preqin Ltd. has said. NBTY has reported two years of falling profit and its stock was down 14 percent this year before today’s announcement.

“This transaction delivers exceptional value to our shareholders,” Scott Rudolph, the company’s chief executive officer, said in the statement.

The purchase is the biggest announced leveraged buyout since IMS Health Inc. agreed to sell itself to investment funds managed by TPG and the CPP Investment Board for $5.2 billion in November, according to Bloomberg data.

The transaction has fully committed financing from Carlyle Partners V and external debt financing provided by Bank of America Merrill Lynch, Barclays Capital and Credit Suisse, the companies said in the statement. Bank of America and Centerview Partners LLC are financial advisers to NBTY. Barclays Capital and Credit Suisse are advising Carlyle.

NBTY’s board has unanimously approved the takeover and recommended the offer to shareholders. The purchase should be completed by the end of 2010.

Aon to buy Hewitt in $4.9-billion deal

(AP) — Insurance broker Aon Corp. said Monday it agreed to buy human resources company Hewitt Associates for $4.9 billion in cash and stock to expand its consulting operations.

The insurance broker said it will pay $50 per Hewitt share, a 41 percent premium over Hewitt's closing price Friday of $35.40.

In mid-morning trading Monday, Hewitt shares climbed $11.49, or 32.5 percent, to $46.89 while Aon shares fell $2.77, or 7.2 percent, to $35.57.

Aon, based in Chicago, plans to integrate Hewitt with its existing consulting and outsourcing operations and create a new unit, Aon Hewitt, after the deal closes. Russ Fradin, chairman and CEO of Hewitt, will become chairman and CEO of Aon Hewitt.

Aon said it will create an "integration team" lead by Greg Besio, chief adminstrative officer of Aon. The team will include Kristi Savacool, senior vice-president of Hewitt Large Markets Benefits Outsourcing; Jim Konieczny, president of Hewitt HR Business Process Outsourcing; Yvan Legris, president of Hewitt Consulting; and Kathryn Hayley, co-chief executive officer of Aon Consulting.

Lincolnshire, Illinois -based Hewitt is a human resources consulting and outsourcing company.

Aon expects the deal will save $355 million annually beginning in 2013, primarily from reducing back-office areas, management overlap and public company costs and getting more from technology platforms. It said the deal will help earnings in 2011 and 2012.

Hewitt stockholders will receive $25.61 in cash and about 0.64 percent of a share in Aon stock per Hewitt share. The total payment will be $2.45 billion in cash and 64 million shares.

The deal is expected to close by mid-November.

RBS CEO: ABN Amro takeover was “a big mistake”

Stephen Hester, chief executive officer of the Royal Bank of Scotland (RBS), has described the acquisition of ABN Amro as a “big mistake”.

Stephen Hester

Mr Hester made the comments in an interview with Welt am Sonntag, a German newspaper.

RBS headed up a consortium, which included Fortis and Santander, to acquire the Dutch bank for €71 billion in 2007.

However, the decision to go-ahead with the takeover was viewed by many industry commentators as one of the reasons behind the financial institution’s weakness and subsequent reliance on government funds when the credit crisis occurred a year later.

The RBS CEO told the newspaper that his predecessor, Sir Fred Goodwin, failed to implement a coherent strategy when he opted to acquire the Dutch business.

Mr Hester also said that he would be “disappointed” if the British government did not start selling down part of its 83 per cent stake in the bank by 2011.

He added that the sale would be a gradual process rather than occurring all at once.

The bank is currently in the process of divesting itself of non-core business assets to boost its balance sheet.

Symantec to acquire Verisign for $1.3bn

Technology provider Symantec has unveiled details of a deal to acquire VeriSign for $1.28 billion.

According to the firm, the transaction includes the acquisition of many of VeriSign’s security and authentication products in identity protection, trust and certification.

The deal is due to be finalised by the third quarter of 2010 following approval from industry regulators.

Acquiring VeriSign should enable businesses to adopt identity security with greater ease across a wider range of technology models
including cloud computing, social networking and mobiles, Symantec explained.

Enrique Salem, president and chief executive officer at Symantec said: "With the combined products and reach from Symantec and VeriSign, we are poised to drive the adoption of identity security as the means to provide simple and secure access to anything from
anywhere, to prevent identity fraud and to make online experiences more user-friendly and hassle-free.”

As part of the transaction, Symantec will take a controlling share in VeriSign’s Japanese business.

Share earnings are expected to be diluted by $0.09 during the fiscal year of 2011 due to the associated costs of the transaction.