by Amal Mohy
Every money maker strives for maximising his investments and wealth and acquisition of other companies not only helps achieving this goal but leads to diversification of industry as well. Notably, the recent declines of share prices have triggered a wave of takeovers in the global market. Here are some of the biggest deals signed this week.
Emera to acquire Teco Energy
Emera Inc., the Canadian utility giant, agreed to buy Teco Energy Inc. for $6.5 billion in cash; a deal that would increase its assets to $20 billion and would boost its position in the United States. Emera’s businesses involve electricity generation, transmission and distribution. The company also operates in gas transmission and utility energy services. Mostly, its operations are in Nova Scotia, Maine and the Caribbean.
Emera said that merging Teco’s electric and gas utility assets, which are based in Florida and New Mexico, would give it a strong platform in growth markets and boost its earnings starting in the first full year of merged operations. Once the deal closes, 56 per cent of Emera’s assets will be in Florida, Emera added. “We have found our ideal match in Teco Energy,” Emera Chief Executive, Chris Huskilson, said in a statement.
GVC agreed to buy Bwin.party
GVC Holdings, a sports-betting and online-gambling operator, agreed to buy Bwin.party Digital Entertainment PLC for £1.12 billion ($1.72 billion). Bwin.party agreed before to close the deal with 888 Holdings PLC., an online-sports-betting rival, for £898.3 million ($1.4 billion); yet GVC’s offer was more appealing in equity and cash.
GVC would benefit from the Bwin brand which is widely well-known and associated with many international football brands. With its online-gaming brands such as PartyPoker and Foxy Bingo, Bwin was such an attractive deal for both 888 and GVC because of its own technology and well-known brands across the world. Bwin Chairman, Philip Yea, recommends that Bwin.party shareholders vote in favor of the deal since GVC’s terms included a better headline value, synergies and cost savings.
BlackBerry to attract more customers
BlackBerry Ltd (BB.TO), a Canadian smart-phone giant, is to take over rival mobile software provider, Good Technology Corp (GDTC.O), for $425 million. This move will help BlackBerry attract more customers for its services business. BlackBerry said it expects to achieve about $160 million in revenue in the first year after the deal closes, perhaps by late November.
BlackBerry Chief Executive, John Chen, said: “There obviously will be hard work involved, but I do see a lot of opportunity here to drive value for our shareholders.” Chen added that BlackBerry will maintain both company’s products while developing a unified platform that customers can upgrade to. According to Chen, a unified product may take a year or two.
“There is a very long history here. We are in an incredibly competitive market and speak to many of the same customers,” said Good Chief Executive Christy Wyatt in an interview published on BlackBerry’s news site. Wyatt said Good’s technology would boost BlackBerry and will support wearable technology such as the Apple Watch.
For more fresh food
General Mills Inc. agrees to sell its frozen-and-canned vegetable business for $765 million to B&G Foods Inc.; owner of more than 40 brands such as Molly McButter and Pirate’s Booty, among others. This deal is triggered by the company’s recent endeavours to focus on products that appeal to consumers’ increasing demands of fresh, less-processed food. General Mills Inc. attempts to develop itself to meet the changes of the American eating habits especially with many customers rejecting frozen and canned food. General Mills said that the deal “reinforces its strategic priority to shape its portfolio for growth.”
German-Russia deal
Germany’s BASF SE, the world’s largest chemical company, and Russia’s OAO Gazprom agreed to conclude an asset-swap deal signed in December 2013 postponed late last year amid political conflicts between Russia and Europe after Russia’s annexation of the Crimea. According to the deal, BASF will exit the gas trading and storage business of its wholly owned oil and gas subsidiary, Wintershall AG, and will expand its production of oil and gas. The deal allows Wintershall access to natural-gas fields in Siberia. “We look forward to further expanding the joint production of natural gas and condensate with our partner Gazprom in western Siberia,” BASF Chief Executive, Kurt Bock, said. The asset swap deal is to close by the end of 2015.
The combined activities of BASF’s planned divestitures yielded about EUR12 billion ($13.35 billion) to sales. BASF’s natural-gas trading business is operated as a 50-50 joint venture between Gazprom and Wintershall. According to the deal, Gazprom will get BASF’s share in that business. Meanwhile, OAO Gazprom will also obtain a 50 per cent share in BASF’s wholly owned North Sea oil exploration and production unit, Wintershall Noordzee. In return, both Gazprom and Wintershall will develop two blocks of the Urengoy natural gas field in western Siberia.
