As I sit down to write, expectations are that British confectionary icon Cadbury PLC will be swallowed whole by Kraft Foods Inc. in an acquisition worth $19.3 billion despite Kraft’s top shareholder Warren Buffett calling the takeover a “bad deal.”
There was still an outside chance that Hershey of the United States and Italy’s Ferrero would make a bid for Cadbury but the sport of deal watching, in this matchup, was virtually done by the middle of January.
The battle for Cadbury has been one of the few interesting and large M&A deals that’s taken place over 2009. Probably the major one for a Canadian company was the three-way deal involving Calgary’s Agrium Inc., CF Industries Holdings Inc., and Terra Industries Inc. At press time, this convoluted deal scenario was still not a whole lot more clear than it has been over the past months, but again is good sport for deal watchers.
Those watchers, not to mention the lawyers involved in the M&A deals, have not had much to get excited about with both the number and value of global M&A deals well down in 2009. It does seem things are looking up, even in Canada which didn’t have quite the same level of slowdown faced by our neighbours to the south.
A group of lawyers from U.S. firm Paul Weiss Rifkind Wharton & Garrison LLP was recently in Toronto to talk M&As. They noted that cross-border M&A activity, particularly by Canadian companies, was growing. In fact, the value of Canadian deals in 2009 was up 94 per cent, to $37.09 billion over 2008, according to Dealogic numbers in their presentation.
The Paul Weiss team said there were concerns about a double-dip recession with consumer debt being replaced by government debt and the threat of increasing interest rates. But they were still optimistic. “There will be significant opportunities with a weak dollar to acquire pretty great assets,” said partner Matthew Abbott. The big difference going forward: more care will be taken and there won’t be a rush for deals to be done without due diligence, they noted.
It does look like there will be some decent action on the field to keep the deal watchers happy and the M&A lawyers busy this year.
The battle for Cadbury has been one of the few interesting and large M&A deals that’s taken place over 2009. Probably the major one for a Canadian company was the three-way deal involving Calgary’s Agrium Inc., CF Industries Holdings Inc., and Terra Industries Inc. At press time, this convoluted deal scenario was still not a whole lot more clear than it has been over the past months, but again is good sport for deal watchers.
Those watchers, not to mention the lawyers involved in the M&A deals, have not had much to get excited about with both the number and value of global M&A deals well down in 2009. It does seem things are looking up, even in Canada which didn’t have quite the same level of slowdown faced by our neighbours to the south.
A group of lawyers from U.S. firm Paul Weiss Rifkind Wharton & Garrison LLP was recently in Toronto to talk M&As. They noted that cross-border M&A activity, particularly by Canadian companies, was growing. In fact, the value of Canadian deals in 2009 was up 94 per cent, to $37.09 billion over 2008, according to Dealogic numbers in their presentation.
The Paul Weiss team said there were concerns about a double-dip recession with consumer debt being replaced by government debt and the threat of increasing interest rates. But they were still optimistic. “There will be significant opportunities with a weak dollar to acquire pretty great assets,” said partner Matthew Abbott. The big difference going forward: more care will be taken and there won’t be a rush for deals to be done without due diligence, they noted.
It does look like there will be some decent action on the field to keep the deal watchers happy and the M&A lawyers busy this year.
