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Mergers & acquisitions: the top tie-ups of 2010

28 декабря 2010

The telecoms industry witnessed a flurry of M&A activity in 2010, ranging from small acquisitions to multi-billion-dollar mega-deals.

The telecoms sector accounted for 9.7% of all M&A deals worldwide in the first nine months of 2010, according to research firm Mergermarket: 135 deals were completed with a total value of $138.3 billion. The technology, media and telecoms (TMT) sectors together accounted for 16.3% of activity, with 1,257 deals yielding a total value of $232.3 billion, the firm said.

So, as the year comes to an end, we take a look back at some of the biggest deals brokered in 2010, from the terms of the agreements to the latest developments.

CenturyTel to buy Qwest in deal worth $22.4bn

THE DEAL

April 2010: CenturyTel offered 0.1664 of a share for every Qwest share; based on CenturyTel's closing price on 21 April, this valued CenturyTel's shares at $6.02 each, and therefore gave Qwest an enterprise value of $10.6 billion. CenturyTel also agreed to assume $11.8 billion of Qwest debt, bringing the total price to $22.4 billion.

WHAT HAPPENED NEXT

In May CenturyTel shareholders approved the company's legal name change to CenturyLink, a brand under which it had been operating since mid-2009.

The Department of Justice and the Federal Trade Commission cleared the transaction in July, having determined that the tie-up did not raise antitrust concerns. Shareholders from both CenturyLink and Qwest approved the merger in August.

LATEST DEVELOPMENTS

In mid-December Colorado became the 14th state, plus the District of Colombia, to approve the merger, leaving seven more states and the FCC to give it the green light.

CenturyLink expects the transaction to close in mid-2011.

Etisalat to acquire 51% of Zain's issued share capital

THE DEAL

November 2010: Etisalat offered to acquire a 46% shareholding in Zain (that represents 51% of its outstanding share capital) at a price of 1.7 Kuwaiti dinars (or just over $6) per share, valuing the Kuwaiti operator at around $11.7 billion. The offer is subject to a number of conditions, including Zain selling off its Zain Saudi Arabia business “in a timely fashion”.

The offer will lapse unless a definitive agreement is reached by 15 January. According to Etisalat, the transaction is unlikely to close before the end of the first quarter of 2011.

WHAT HAPPENED NEXT

Etisalat is working on the financing for the deal. The company said in November that it was preparing to raise $8 billion through a combination of bonds and sukuk issues. Later in the month unnamed sources reported that the telco was working out the finer details of the financing and conducting due diligence on Zain.

LATEST DEVELOPMENTS

In December rumours were circulating that the deal had met opposition from certain Zain shareholders and as such the size of the stake Etisalat would be able to buy had been reduced to 40%.

In response, Etisalat issued a statement on 19 December insisting that “the 46% conditional deal is still on, as agreed upon in the initial proposal.” The company said it will inform stakeholders directly when it has news to disclose.

Bharti seals $9bn deal for Zain's Africa assets

THE DEAL

March 2010: Bharti Airtel announced it had entered an agreement with Zain Group to acquire its African assets (Zain Africa), based on an enterprise valuation of $10.7 billion. The deal comprised $9 billion in cash plus the assumption of $1.7 billion of debt. It included Zain's assets in 15 African markets.

WHAT HAPPENED NEXT

The acquisition was completed in early June. Bharti rebranded the African operations as Airtel in November.

LATEST DEVELOPMENTS

In November Bharti Airtel chairman Sunil Bharti Mittal shared his goal to increase the company's African mobile subscriber base to 100 million over the next two years, up from around 40 million at present.

Vimpelcom signs $6.5bn deal with Egypt's Sawiris

THE DEAL

October 2010: Russia's Vimpelcom agreed a merger of assets with Weather Investments that includes the latter's Wind unit in Italy and a 51.7% stake in Orascom Telecom. The cash-and-stock deal was widely reported to be worth $6.5 billion.

WHAT HAPPENED NEXT

Egyptian businessman and founder of Weather Investments Naguib Sawiris announced the forthcoming creation of a new company – known under the working title of Orascom Telecom 2 – that will comprise his assets in Egypt that were not included in the Weather/Vimpelcom deal. Sawiris will hold 51% of the publicly-listed outfit.

Orascom Telecom's Algerian unit Djezzy proved to be an early hurdle to the deal. The Algerian government is keen to take over the business, having had a strained relationship with Orascom for some time. International arbitration could be an option. The parties involved said they were committed to working towards a deal, irrespective of the situation in Algeria.

Norway's Telenor, which holds a stake of almost 40% in Vimpelcom, expressed concerns over the deal, in particular the Algeria issue.

LATEST DEVELOPMENTS

On 19 December Telenor informed Vimpelcom that in its capacity as shareholder it does not support the merger of Vimpelcom with Weather Investments. The following day the Vimpelcom supervisory board approved the transaction, but due to Telenor's opposition was unable to reach a decision on “certain shareholder-related issues”. Vimpelcom will now attempt to negotiate a revised transaction with Weather.

TDC confirms Sunrise sale to CVC for $3.25bn

THE DEAL

September 2010: Denmark's TDC revealed it would sell its Swiss subsidiary Sunrise to private equity firm CVC Capital Partners through an agreement that valued the company at 3.3 billion Swiss francs ($3.25 billion).

WHAT HAPPENED NEXT

The companies obtained clearance from Swiss Competition Commission (ComCo), the Federal Office of Communications (BAKOM) and the Federal Communications Commission (ComCom).

LATEST DEVELOPMENTS

The companies announced the completion of the deal on 28 October.

NTT in overseas push with £2.1bn Dimension Data buy

THE DEAL

July 2010: Japan's NTT agreed to acquire the entire issued and to be issued ordinary share capital of South African IT services provider Dimension Data for approximately £2.12 billion ($3.2 billion) in cash. The companies expected the deal to close by the end of October.

WHAT HAPPENED NEXT

NTT published its offer document in August and by 11 October had received acceptances representing 93.42% of Dimension Data shares, thereby satisfying the conditions of the offer and having the offer declared wholly unconditional.

In the meantime it received the required regulatory approvals for the deal to go ahead.

LATEST DEVELOPMENTS

Dimension Data delisted in London and Johannesburg in mid-December.

Carlyle Group buys Syniverse for $2.6bn

THE DEAL

October 2010: Carlyle Group agreed to acquire all of the outstanding common shares of mobile technology firm Syniverse Technologies for $31 per share in cash, resulting in a deal valued at around $2.6 billion.

WHAT HAPPENED NEXT/LATEST DEVELOPMENTS

Syniverse will hold a special meeting for stockholders on 12 January 2011 to consider and vote upon the buyout proposal.

H-P to acquire Palm for $1.2 billion

THE DEAL

April 2010: The boards of directors of Hewlett-Packard and Palm approved a deal that would see H-P pay $5.70 in cash per share for Palm's common stock; the deal gave Palm an enterprise value of $1.2 billion

WHAT HAPPENED NEXT

H-P completed the acquisition on 1 July. At the same time the company said it would use Palm's webOS operating system to run a number of new devices, including smartphones, tablets and netbooks.

However, in September H-P unveiled a new printer with detachable tablet powered by a customised version of the Android OS.

LATEST DEVELOPMENTS

In October H-P rolled out a new version of webOS and launched the Palm Pre 2 – the first device to run on the updated OS. It came to market first in France.

Nokia Siemens buys Motorola's networks arm for $1.2bn

THE DEAL

July 2010: Nokia Siemens Networks agreed to acquire the majority of Motorola’s wireless network infrastructure assets for $1.2 billion in cash. The deal made provision for around 7,500 employees to transfer to NSN from Motorola, including staff from large R&D sites in the U.S., India and China. The acquisition did not include Motorola's iDEN business or its wireless network infrastructure patents.

WHAT HAPPENED NEXT

In September Nokia Siemens Networks unveiled a business reshuffle to enable it to accommodate the Motorola assets. Head of customer operations Bosco Novak was charged with leading customer-related issues in the Motorola integration planning process, as well as having responsibility for Customer Operations West. Head of global services Ashish Chowdhary was assigned Customer Operations East. The changes are effective from 1 January 2011.

Nokia Siemens said it will announce a successor to lead its global services business at a later date.

LATEST DEVELOPMENTS

In mid-December the European Commission gave the deal the green light, ruling that it would not impede competition.

The transaction is still slated to close before the end of the year.

Источник: Total Telecom

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