In case you missed any of these catchy tunes last week, it's not too late to boogie down. Grab your headphones, CD player, iPod, speakers, guitar, cowbell -- whatever you need. It's time for the M&A Mix Tape.
"It's Not Over" by Daughtry and Citi
In this song, former American Idol contestant Chris Daughtry sings: "Well, I'll try to do it right this time around / it's not over." And CEO Chuck Prince and Citigroup
At a time when banking and investment-banking firms alike have been living large, Citi has conspicuously lagged. In a step to try to change its fortunes, the bank announced a restructuring plan last week that will cut 17,000 jobs and incur a $1.4 billion pre-tax charge. Citi expects that the cuts will save them $3.7 billion in 2008 and $4.6 billion in 2009.
Meanwhile, Citi continues to charge ahead on the acquisition front. Last week, it picked up two new businesses. A $426 million acquisition of Taiwan's Bank of Overseas Chinese (BOOC) will bring Citi's Taiwan assets to $22.8 billion. This also shows the continuing interest that U.S. financial firms have in aggressively expanding their overseas operations.
And speaking of overseas, we're still waiting on an outcome for Citi's outstanding bid for Nikko Cordial. A group of Nikko's major investors have been continuing to hold out against that deal in hopes that Citi would raise its bid.
Closer to home, Citi also acquired hedge fund Old Lane LP last week for an undisclosed amount. While the deal brings $4.5 billion of assets into the Citi fold, it also scores Citi some highly touted management. Old Lane's co-founder, Vikram Pandit, the former head of Morgan Stanley's
"I'm a Flirt" by R. Kelly featuring Dow Chemical
Let it not be said that the world of finance doesn't have its daytime-soap-opera moments. Last week, Dow Chemical
But it wasn't to be. Later in the week, Dow fired two executives over discussions that they were allegedly having on the sly. Dow CEO Andrew Liveris has been very vocal in saying that Dow is not interested in going private. He even appeared on CNBC last week to reiterate that stance.
On the sly or not, though, it appears that someone has been doing some work on the idea of a Dow buyout. If the P/E firms ran the numbers and liked them, it could be interesting to see whether they continue to knock at Dow's door and try to spark some interest.
"For What It's Worth" by Buffalo Springfield and Google
Well, maybe the executives at Google
While I don't doubt that the multiple that Google paid for DoubleClick was aggressive, particularly because Microsoft
For Google, the acquisition means picking up a broad base of publishing relationships and continuing to expand its business. As with the YouTube acquisition, though, the one thing that's for sure here is that the sellers have done quite well for themselves. When they acquired DoubleClick in 2005, H&F paid $330 million in equity and gave it a total enterprise value of $1.1 billion. Not a bad two-year return!
- The Chrysler sale is moving forward, but apparently without billionaire Kirk Kerkorian and his Tracinda. According to a report from The Wall Street Journal, Chrysler's Rudiger Grube has been meeting with potential buyers. The list has included Blackstone, Centerbridge Capital, Cerberus, Magna International, and Ripplewood Holdings -- but, notably, no Tracinda.
- Potentially following in the footsteps of fellow electric utility TXU, Atlanta-based Mirant has tapped JPMorgan to help it explore strategic alternatives, including a possible sale. Far from the $45 billion that TXU is being sold for, Mirant currently has an enterprise value of about $12 billion.
- In a deal that was far from infantile in size, Nestle agreed to pay $5.5 billion for the Gerber business from Novartis. According to The Deal, Gerber is expected to generate about $2 billion in sales this year.
Well, that's it for this album, but be sure to keep tuned in to The Motley Fool for more tunes from the M&A front.
Microsoft is a Motley Fool Inside Value recommendation. Dow Chemical and JPMorgan Chase are Motley Fool Income Investor picks. TXU is a former Income Investor recommendation. Try any of our investing services free for 30 days.
Fool contributor Matt Koppenheffer is currently ranked 4,355 out of 26,694 Fools participating in The Motley Fool's CAPS service, and he encourages everyone to get heard. He does not own shares of any of the companies mentioned. The Fool's disclosure policy doesn't fear the reaper.