Notable Mergers and Acquisitions of the Day 04/03: (TAP) (RY) (FOSL) (FSR)

• CVC Capital Partners announced that Molson Coors Brewing Company (NYSE: TAP) has signed a definitive agreement with StarBev L.P., owned by funds advised by CVC Capital Partners Limited and StarBev management, to acquire StarBev for €2.65 billion ($3.54 billion).
  
  Headquartered in Amsterdam, Netherlands and Prague, Czech Republic, StarBev operates nine breweries in Central and Eastern Europe and generated 2011 sales of nearly €0.7 billion ($1.0 billion) and earnings before interest, taxes, depreciation and amortization (EBITDA) of €241 million ($322 million).
  
  
  StarBev, which employs approximately 4,100 people, has brewing operations in the Czech Republic, Serbia, Croatia, Romania, Bulgaria, Hungary, Montenegro and also conducts operations in Bosnia-Herzegovina and Slovakia. StarBev brews approximately 13 million hectoliters annually and holds a top 3 market share position in each of its markets. StarBev’s portfolio of more than 20 brands includes local champions such as Borsodi, Kamenitza, Bergenbier, Ozusko, Jelen and Niksicko and also distributes brands such as Stella Artois, Beck’s, Hoegaarden, Lowenbrau and Leffe under license.
  
  The transaction is subject to approval by certain European competition authorities and is expected to close in the second quarter of 2012. Following the close, StarBev will be operated as a separate business unit within Molson Coors and will be headquartered in the Czech Republic.
  
  Nomura International acted as financial advisor and Freshfields Bruckhaus Deringer LLP acted as legal advisor to CVC and StarBev L.P.
  
  
• Royal Bank of Canada (NYSE: RY) entered into a definitive agreement to acquire the 50 per cent stake that RBC does not already own in the joint venture RBC Dexia Investor Services Limited (RBC Dexia) from Banque Internationale Luxembourg S. A. (BIL) (formerly Dexia Banque Internationale Luxembourg S. A.) for total consideration of €837.5 million (C$1.1 billion) in cash. Following the closing of the transaction RBC will own 100 per cent of RBC Dexia.
  
  In conjunction with entering the agreement, RBC Dexia has sold €1.4 billion (C$1.9 billion) in nominal value of Dexia Group fixed income securities back to the Dexia Group and acquired approximately an equivalent amount of U.S. dollar-denominated securities consisting primarily of notes issued by large global financial institutions. RBC Dexia will incur a loss from the sale of the Dexia Group securities and RBC's proportionate share of this loss is approximately $30 million after tax, which will be recorded in the second quarter. RBC Dexia's capital position is not materially impacted from this sale and purchase of securities.
  
  With this acquisition of the other 50 per cent in RBC Dexia that RBC does not already own, we are required, from an accounting perspective, to revalue our existing investment in the joint venture to reflect the purchase price. This revaluation results in a non-cash loss of approximately $170 million after tax, primarily reflecting the write-down of intangibles. The majority of this loss will be recorded in the second fiscal quarter.
  
  RBC expects the acquisition to be moderately accretive to earnings in 2013.
  
  
• Fossil, Inc. (Nasdaq: FOSL) has completed, effective April 2, 2012, the previously announced acquisition of Skagen Designs, Ltd. and certain of its international affiliates for $231.7 million in cash, which includes a working capital adjustment of approximately $6.7 million, and 150,000 shares of Fossil, Inc. common stock. In addition, the sellers may receive up to 100,000 additional shares of Fossil common stock if Fossil's net sales of Skagen-branded products exceed certain thresholds. Skagen Designs manufactures, markets and distributes watches, jewelry, sunglasses and clocks.
  
  
• Flagstone Reinsurance Holdings, S.A. (NYSE: FSR) made two deals Tuesday
  • entered into a definitive agreement with a wholly-owned subsidiary of ANV Holdings BV (“ANV”), under which ANV, with capital support from Ontario Teachers’ Pension Plan Board, will acquire the Company’s Lloyd’s operations for approximately $48 million in cash. As a result of the transaction, Flagstone will also release approximately $162 million of underwriting capital currently supporting its Lloyd’s operation.
    
    
  • entered into a definitive share purchase agreement with BF&M Limited (“BF&M”), and certain other parties, under which BF&M will acquire the parent of Island Heritage for approximately $68 million in cash. Flagstone currently owns an approximate 60% interest in Island Heritage and expects to receive about $40.8 million in cash from the sale.

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