Notable Mergers and Acquisitions of the Day 12/1: GE/CMCSA, GMCR/PEET, IT, BLK
- In a move that will clear the path for Comcast Corp. (NASDAQ: CMCSA) to purchase control of NBC Universal, General Electric Co. (NYSE: GE) has agreed to buy partner Vivendi SA's stake in the company for $5.8 billion according to people familiar with the deal that has been in the works since the spring.
The Vivendi 20 percent stake in NBC Universal has been a roadblock in the negotiations that will allow Comcast to gain a controlling stake in the company. A final agreement on an entertainment joint-venture controlled by Comcast, the largest U.S. cable operator, could be announced as soon as this week.
Vivendi has been seeking an upfront payment structure that would ensure the company in case the pending GE-Comcast transaction is blocked by regulators.
According to the people close to the deal, Vivendi would receive $2 billion more in payment if the separate transaction does not get closed by the end of 2010. Vivendi had the ability to win these concessions from GE, since it had the potential power to block the deal with Comcast.
Regulatory experts expect the GE-Comcast deal could possibly take as long as six months to more than a year before approval is granted.
The potential partnership between GE and Comcast would create one of the world's largest media companies. The tentative deal between the two companies has the existing NBC Universal valued at $30 billion.
Shares of GE are up 1% to $16.25 before the market opens on Tuesday, while Comcast shares are at $14.90, up 1.6%.
- Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) today issued the following statement in response to the announcement that Peet's Coffee & Tea, Inc. (NASDAQ: PEET) has submitted a revised offer to acquire Diedrich Coffee, Inc. (NASDAQ: DDRX) for $32.50 per share in a combination of cash and stock.
"We are focused on creating value for our shareholders," said Lawrence Blanford, President and CEO of GMCR. "In that regard, we remain firmly committed to this strategic combination and are in the process of evaluating our next steps."
GMCR is confident that a combination with Diedrich will benefit consumers by enhancing the robust choice of products. With respect to timing, GMCR noted that it has thoroughly evaluated this transaction and is confident it can close promptly in early 2010. The coffee and coffee maker businesses are very large and highly fragmented and GMCR's sales constitute just a small fraction in each. GMCR believes that Peet's comments regarding a perceived timing advantage are significantly exaggerated and that Peet's is now resorting to misrepresentations in the absence of being able to offer significantly more value to Diedrich shareholders.
Additionally, GMCR's all-cash offer continues to be the superior proposal of record. In contrast, Peet's offer has a significant stock component and its shares have demonstrated significant volatility over the last 90 days. GMCR believes that Diedrich shareholders will recognize that a transaction with Peet's would result in a highly leveraged company.
BofA Merrill Lynch is serving as financial advisor to GMCR on this transaction and Ropes & Gray LLP is serving as its legal advisor.
- Gartner, Inc. (NYSE: IT) today announced that it has agreed to acquire AMR Research, Inc. for approximately $64 million in cash, subject to certain closing adjustments. With projected full year 2009 revenues of approximately $40 million, AMR Research is a leading research and advisory services firm serving supply chain management and IT professionals. The firm is recognized for its research focused on the intersection of business processes and technology for the supply chain professional.
The acquisition of AMR Research is expected to expand Gartner's suite of research offerings and also complement its consulting and events businesses. Moreover, the addition of AMR Research's experienced sales team should enhance Gartner's ability to further penetrate the vast market opportunity for syndicated research. The combination is also expected to drive operational efficiencies and cost savings.
Gartner intends to finance the acquisition through the use of cash on hand, as well as borrowings under the Company's existing line of credit. The transaction is subject to customary closing conditions and is expected to close later this month.
Gartner does not expect the acquisition of AMR Research to have a material impact on its 2009 financial results, but does expect it to be significantly accretive to its revenue, earnings and cash flow over time. On a reported GAAP basis, which includes the impact of estimated acquisition and integration related charges, the transaction is expected to be dilutive to income per share by ($0.11) - ($0.09) in 2010 and accretive to income per share by at least $0.01 - $0.04 in 2011. Excluding estimated acquisition and integration related charges, the transaction is expected to be modestly accretive to income per share in 2010 and add at least $0.04 - $0.06 to income per share in 2011.
- BlackRock, Inc. (NYSE: BLK) today announced that it has completed its merger with Barclays Global Investors, including the market-leading iShares exchange traded funds business. The combined firm will operate under the BlackRock name and the iShares brand will be retained.
In connection with the closing of the merger, BlackRock also announced that John Varley, Group Chief Executive of Barclays PLC, and Robert E. Diamond Jr., President of Barclays PLC, have joined the BlackRock Board of Directors.
John Varley. Mr. Varley is Group Chief Executive of Barclays PLC. Prior to being named to his current position in September 2004, he had served as Group Deputy Chief Executive beginning in January 2004. He held the position of Group Finance Director from 2000 until the end of 2003. Mr. Varley joined the Executive Committee in September 1996 and was appointed to the Barclays' Board in June 1998. He was Chief Executive of Retail Financial Services from 1998 to 2000 and Chairman of the Asset Management Division from 1995 to 1998. Mr. Varley also serves as a non-executive director of AstraZeneca PLC.
Robert E. Diamond Jr. Mr. Diamond is President of Barclays PLC and Chief Executive Officer of Corporate and Investment Banking and Wealth Management, comprising Barclays Capital, Barclays Corporate and Barclays Wealth. He is an Executive Director of the Boards of Barclays PLC and Barclays Bank PLC and has been a member of the Barclays Group Executive Committee since September 1997. He joined the firm in summer 1996. Mr. Diamond is a member of the Board of Directors for the Institute of International Finance and member of the International Advisory Board of the British-American Business Council.
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