United Airlines parent UAL Corp. (Nasdaq: UAUA) and Continental Airlines, Inc (NYSE: CAL) announced today (Monday) that they plan to merge and create the world's largest airline in a stock swap valued at $3.17 billion.
The merger is the is the biggest airline deal since Delta Air Lines, Inc. (NYSE: DAL) bought Northwest Airlines Corp. in 2008, and it further demonstrates how an industry plagued by losses has devolved into a pattern of consolidation.
The "merger of equals," as described by the companies, would top Delta as the biggest global carrier, have combined annual revenue of $29 billion, and $7.4 billion in unrestricted cash. The deal should yield cost savings of $1 billion to $1.2 billion by 2013.
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United, Continental Merge Into World's Largest Airline
AIG Sells Alico Unit to MetLife for $15.5 Billion, Raising More Cash to Pay Fed
American International Group Inc. (NYSE: AIG) today (Monday) agreed to sell its American Life Insurance Co. unit, better known as Alico, to MetLife Inc. (NYSE: MET) for $15.5 billion, taking yet another step towards paying off its U.S. government debt.
MetLife will pay $6.8 billion in cash and $8.7 billion in equity securities for Alico, AIG's second-largest foreign life-insurance business.
With a deal inked a week ago to sell its Asian life-insurer unit, American International Assurance Ltd. (AIA), to Prudential PLC (NYSE ADR: PUK) for $35.5 billion, the Alico sale means AIG is now expected to return $32 billion in cash to the Federal Reserve Bank of New York in the coming months - provided both deals close as scheduled by yearend.
MetLife will pay $6.8 billion in cash and $8.7 billion in equity securities for Alico, AIG's second-largest foreign life-insurance business.
With a deal inked a week ago to sell its Asian life-insurer unit, American International Assurance Ltd. (AIA), to Prudential PLC (NYSE ADR: PUK) for $35.5 billion, the Alico sale means AIG is now expected to return $32 billion in cash to the Federal Reserve Bank of New York in the coming months - provided both deals close as scheduled by yearend.
How to Make the Most of a Resurgent M&A Market in 2010
Unlike this time last year, prospects for U.S. corporate mergers and acquisitions (M&A) appear robust heading into the new year. And that bodes well for investors astute enough to identify the sectors where action will likely be hottest.
As an indication of the improving outlook, nine deals with a total value of $19.9 billion were announced from the start of December through Christmas Eve. That came on top of November's 14 M&A announcements, which were valued at $63.175 billion - although that number was distorted somewhat by Warren Buffett's $26.52 billion bid for the 78% of Burlington Northern Santa Fe Corp. (NYSE: BNI) he didn't already own.
By contrast, archives of merger-tracking Web site The Online Investor, show 15 deals involving publicly traded U.S. stocks in December 2008, but the total value was a meager $3.986 billion. (That's not counting the $8.8 billion merger of Japanese electronics giants Panasonic Corp. (NYSE ADR: PC) and Sanyo Electric Co. (OTC: SANYY), which brightened the global picture somewhat.) November 2008 had 14 deals valued at just $4.898 billion.
As an indication of the improving outlook, nine deals with a total value of $19.9 billion were announced from the start of December through Christmas Eve. That came on top of November's 14 M&A announcements, which were valued at $63.175 billion - although that number was distorted somewhat by Warren Buffett's $26.52 billion bid for the 78% of Burlington Northern Santa Fe Corp. (NYSE: BNI) he didn't already own.
By contrast, archives of merger-tracking Web site The Online Investor, show 15 deals involving publicly traded U.S. stocks in December 2008, but the total value was a meager $3.986 billion. (That's not counting the $8.8 billion merger of Japanese electronics giants Panasonic Corp. (NYSE ADR: PC) and Sanyo Electric Co. (OTC: SANYY), which brightened the global picture somewhat.) November 2008 had 14 deals valued at just $4.898 billion.
Lazard Puts Future in M&A with New CEO
In a signal of confidence for the future of mergers-and-acquisitions (M&A), Lazard Ltd. (NYSE: LAZ) appointed Kenneth Jacobs as its chairman and chief executive officer following the unexpected death of famed dealmaker Bruce Wasserstein.
Jacobs, a 21-year company veteran, was most recently CEO of Lazard North America and has a history of leading M&A advisory teams.
“Jacobs is clearly qualified for the position because he has run the North American operations of the company,” Dick Bove, vice president and equity research analyst at Rochdale Securities LLC told Bloomberg Television. “It should be positive for Lazard.”
Jacobs, a 21-year company veteran, was most recently CEO of Lazard North America and has a history of leading M&A advisory teams.
“Jacobs is clearly qualified for the position because he has run the North American operations of the company,” Dick Bove, vice president and equity research analyst at Rochdale Securities LLC told Bloomberg Television. “It should be positive for Lazard.”
As Japan's Economic Sun Sets – Albeit Temporarily – Look to Korea as an Asian Profit Play
By Martin Hutchinson Contributing Editor I have been much more positive about the Japanese economy than most other analysts in recent months, largely because I believed that many of the problems from the Japanese recession of 1990-2003 were finally in the country’s rearview mirror. In particular, I believed that the Japanese budget deficit – which, […]
Cleveland-Cliffs Taps Into Emerging Market Steel Demand with $10 Billion Buyout of Alpha Natural Resources
By Jason Simpkins Associate Editor Cleveland-Cliffs Inc. (CLF), a top producer of iron ore pellets and supplier of metallurgical coal in North America, will buy Alpha Natural Resources Inc. (ANR) in an effort to bolster its coal reserves and exploit the soaring demand for steel among emerging markets worldwide. Cleveland-Cliffs is paying $10 billion for […]
InBev Finally Woos Anheuser-Busch with Higher Offer, Top Billing
By Jennifer YousfiManaging Editor In a move that surprised investors, Anheuser-Busch Companies Inc.'s (BUD) board voted to end more than 150 years as a family-controlled company, accepting a $70-per-share bid from Belgium's InBev NV in a deal that puts a $52 billion price tag on the iconic American brewer. The St. Louis-based Anheuser-Busch – which […]
Sirius-XM Merger: Should Investors Buy?
By Mike Caggeso Associate Editor Minutes after the Dept. of Justice approved Sirius Satellite Radio Inc.'s (SIRI) merger with XM Satellite Radio Holdings Inc. (XMSR), each company's shares soared by double-digits… Yet, until the merger is completed, it's hard to know whether that sharp jump will continue… whether now is a time to jump in […]