Ravi Madhavan's A&D Blog

BCG on M&A in uncertain times

This BCG piece touches on the importance of "invest[ing] more in information," when contemplating M&A in uncertain times like these. The argument is that there is a need to spend more time and resources underdtanding market and competitive dynamics as a prelude to target identification and dealmaking. 

Monster Worldwide

NYT DealBook has this:

Shares of Monster Worldwide surged on Thursday after the company’s chief executive said that the board and management were pursuing “strategic alternatives to increasing shareholder value.”

Such language is Wall Street code for considering a sale of the company. The online jobs listing company has a market value of $969 million, but its shares have fallen by half in the last 12 months.

Read more here.

 

 

Clean rooms in M&A

Here is an Accenture piece on clean rooms in the M&A process.

Sketch of a Chinese-acquired company in the Rust Belt

Very nice article in WSJ about Nexteer, a company in Saginaw, Michigna, now owned by Chinese investors. Excerpt:

SAGINAW, Mich.—This struggling city, staggered by a flurry of blows during the recession, is getting a lift from an unlikely place.

Nexteer Automotive, Saginaw's biggest remaining industrial employer, was on the verge of closing less than three years ago, its 3,000 or so jobs in danger of evaporating, when the Chinese showed up. "If their money helps rebuild the community, I'm cool with it," says Mayor Greg Branch.

In 2010, Pacific Century Motors, controlled by Aviation Industry Corp. of China and Beijing E-town International Investment Co., an investment arm of the city of Beijing, bought the money-losing auto-parts maker from its corporate parent, General Motors Co., for about $450 million. With that, this city went from being an exhibit of America's industrial decline to a case study in the impact of Chinese investment money on U.S. communities.

"There were a lot of concerns about the Chinese coming over and packing this place up" and moving the jobs to China, says Matt Beaver, a vice president of United Auto Workers Local 699. "People were really scared the Chinese would take the patents."

Today, few people in town are wringing their hands about the Chinese. Inside a 59-year-old factory at Nexteer's sprawling complex, contractors are ripping out antiquated machine lines and installing new equipment to produce an electronic steering system for the next generation of GM's large pickup trucks and SUVs. The company, for years known as Saginaw Steering Gear, has hired more than 100 engineers in Saginaw last year and is looking for 80 more this year.

 

ThyssenKrupp's sale of Stainless steel unit

NYT DealBook report of ThyssenKrupp's divestment here.The deal is noteworthy because of the way it involved negotiations with affected employees. Excerpt:

The sale of Inoxum to Outokumpu of Finland was widely expected after prolonged negotiations with ThyssenKrupp’s employees, who feared the deal would result in job cuts. Ultimately, ThyssenKrupp reached a compromise with its employees on Tuesday that would eliminate 850 positions in Germany.

 

McKinsey Global Survey on M&A Organization

Highlights here.

Nice illustration from the M&A strategy playbook

Carl Icahn's offer to buy metals recycler Commercial Metals Company (NYT DealBook report here) is an exemplar of what often happens in M&A, displaying features such as the search for scale (combining target with prior acquisition) and a multi-track approach (offer to management with the implied threat of a proxy fight if rebuffed).

Yahoo letter

By way of NYT DealBook and Business Insider, here's some background, including a letter to employees, on reports that Yahoo has received bids.

AT&T - T-Mobile transaction

This website, set up by AT&T, has a lot of background and detail on the proposed transaction, including redacted versions of FCC filings. The latest news is that the FCC has extended its review of the deal.

Disney/ Pixar and Cars 3

NYT has an interesting take on how Pixar's and Disney's approaches - we might call them dominant logics - may or may not be meshing post-merger, suggestive of a "collision between creativity and cash," as the headline puts it.