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B&E This Fortnight
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B&E This Fortnight

Issue Date - 09/06/2011


Japan Upbeat on M&As

Taking a giant step towards shaking off the slump bedevilling the Japanese industry, pharma giant Takeda and nuclear reactor manufacturer Toshiba have decided to lead the nation’s aspirations for cross-border takeovers. The unprecedented earthquake has taken a heavy toll on the entire nation, shrinking the Japanese economy by more than 3.7% for the first quarter Y-o-Y. So, realising that they can’t survive on domestic business alone, Takeda agreed to take over pharma company Nycomed, which gets most of its revenue from emerging markets, for $13.7 billion, whereas Toshiba agreed to shell out $2.3 billion for buying Landis+Gyr, a Swiss electronic-metering company. Taken togther, the two deals account for a whopping $16 billion. Japanese companies have traditionally followed the policy of hoarding cash, especially in times of economic distress. But now the thriftiness is being shrugged off as more Japanese firms now scout for across-the-border acqusitions. Boosting the M&A wave further are big firms like Mitsui Sumitomo Insurance Co, which has readied plans for the acquisition of Indonesia-based PT Sinar Mas Multiarta’s life insurance unit for $818 million; another company, Sumimoto Mitsui Financial Group Inc has been in talks to buy 25% stake in Malaysian Financial lender RHB Capital Bhd for $1.6 billion.

Symantec’s purchase

Symantec Corp, makers of Norton, the popular anti-virus software will acquire Clearwell Systems, a privately held database specialist firm, for $390 million in an all cash deal. The deal is expected to close in the September quarter. With this move, the world’s No. 5 software maker is aiming to shore up its storage and cloud computing capability, and become a key player in the data discovery market. Symantec has said that Clearwell’s eDiscovery tools will help its Enterprise Vault eDiscovery system and also the other cloud-based database. Clearwell specialises in ‘electronic discovery’ or the categorising/processing of data, a market that Gartner estimates will be worth $1.7 billion by 2014. Law firms are increasingly relying on such IT companies that can archive and search massive troves of court documents, which simplifies the vital discovery process and cuts down on time and costs otherwise spent on painstaking staff work. Symantec disclosed that the purchase would dilute adjusted earnings by 1.5 cents per share for the 2012 fiscal, and is expected to add to fiscal 2013 earnings. Symantec shares held steady around $19.57 in after-hours trade following the announcement.

BP-Rosneft part ways After the disastrous spill at the Gulf of Mexico last year, BP’s effort to pump up growth by sewing up an alliance with Russian energy giant Rosneft collapsed after it failed to resolve disputes involving its partners at its Russian venture TNK-BP. The unravelling of BP’s deal with the state-controlled Rosneft has put paid to the British oil firm’s hopes to increase its foothold in Russia’s offshore arctic oil fields where there may be 60 billion barrels of oil in an area the size of the North Sea. The coming apart of the proposed alliance is also a severe blow for the British firm’s chief executive, Bob Dudley, who had initiated the Rosneft deal in January this year as a way to ensure long term growth and revive his company’s reputation. The Russian deal came unstuck after Dudley failed to overcome legal opposition from the British company’s existing partner in Russia, a grouping of Russian billionaires represented by the Alfa-Access-Renova consortium. They objected to the Rosneft deal and took court action to block it. Rosneft decided to pull out of the proposed alliance with BP and search for new partners to explore the three Arctic Kara Sea blocks earmarked for the offshore venture with BP.


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