Corporate Finance

Top 10 Deals Announced in 2016


1. AT&T & Time Warner

This merger is one of the most talked about deals from 2016 still in the works. It has a high profile not just because of its size but because of the amount of media exposure it had during the 2016 US election. This deal would combine Time Warner’s content with AT&T’s communication systems such as cable TV infrastructure, broadband internet services, satellite TV systems and cellular-data networks. Since being elected, Donald Trump has criticized the deal but, following the pick of Makan Delrahim to head the Justice Department office that reviews mergers, it seems likely the threat to block AT&T will not materialize.

 

2. Bayer & Monsanto

The second-largest deal of the year was announced by German pharmaceutical and chemicals giant Bayer, which declared its intention to buy US seed and agricultural company Monsanto. This merger means the combined company would have control over a quarter of the world’s seeds and pesticides. The deal, accepted by shareholders in December 2016, is awaiting regulatory approval. 

 

3. Sunoco Logistics & Energy Transfer Partners

In November 2016, Sunoco Logistics Partners and Energy Transfer Partners agreed to merge. Sunoco purchased Energy Transfer Partners in a $21 billion all-stock deal, while also assuming some $30 billion in long-term debt on Energy Transfer Partners’ balance sheets. This deal is expected to yield over $200 million in annual savings by 2019. In a sense the deal was like an in-house merger as both companies are controlled by Energy Transfer Equity.

 

4. British American Tobacco & Reynolds American

In October 2016 British American Tobacco (BAT) offered $49 billion to acquire Reynolds American. BAT already owns 42% of Reynolds American but the deal would see the company purchase the remaining 58%. This deal is in an effort to help the two companies gain market share and create alternative cigarettes. In January 2017 the two companies agreed that the acquisition would take place.

 

5. Qualcomm & NXP Semiconductors

In October 2016, San Diego-based Qualcomm announced plans to buy Holland’s NXP Semiconductors for about $47 billion, including debt. Dealogic declared this the biggest semiconductor deal on record. This merger will give Qualcomm a stronger foothold in areas where it had been weak, including self-driving cars, mobile payment devices, and sensors for drones and other smart devices.

 

6. CNAC Saturn (ChemChina) & Syngenta

In February 2016, ChemChina announced their interest in buying 100% of the outstanding share capital of Syngenta at a price of $465 per ordinary share. The intended offer values Syngenta’s total outstanding share capital at around $43 billion. This is the largest ever cross-border transaction made by a Chinese acquirer.

 

7. Enbridge & Spectra Energy

Creating one of North America’s largest infrastructure companies, the merged company is set to be valued at $165 billion. Enbridge shareholders are expected to own approximately 57% of the combined company, to be called Enbridge Inc. After announcing the deal in June 2016, the company anticipates a 15% annualized dividend increase in 2017.

 

8. Praxair & Linde

In December 2016 Praxair, an American industrial gases company announced their interest in acquiring German chemical company Linde AG, which would allow the combined company to leverage Praxair’s operational excellence and Linde’s expertise in leadership technology. The transaction is expected to create $1 billion worth of annual synergies. Post-merger, Linde and Praxair shareholders will each own approximately 50% of the new holding company.

 

9. CenturyLink & Level 3 Communications

In October 2016 the two companies announced their intention to merge, forming the second largest US communications provider serving global enterprise customers. This deal will allow the combined company to deliver comprehensive services and solutions to a network of 350 metropolitan areas and 75,000 on-net buildings. Under the terms of the agreement, CenturyLink shareholders will own approximately 51% and Level 3 shareholders approximately 49% of the combined company.

 

10. Baker Hughes & GE Oil & Gas

In October 2016, UK-based oilfield service company Baker Hughes announced plans to acquire GE Oil & Gas. The new company would become one of the industry’s biggest players and have new capabilities in oilfield services, equipment manufacturing and related technology. The merger, finalized in July 2017, saw GE acquire 62.5% of the combined group with the remainder floated on the New York Stock Exchange.

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