Top 10 business deals of 2010

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TOP 10 BUSINESS DEALS OF 2010

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TOP 10 BUSINESS DEALS IN 2010


UNITED UNITES WITH CONTINENTAL

• In a May, United and Continental announced a $3.2 billion hook-up to create the world's largest airline.

• When the integration is completed, the company will serve 378 airports with hubs in 10 cities. It will have 5,811 daily departures and an estimated 144 million passengers a year.

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The airline industry consolidated yet again in 2010.


GENERAL MOTORS' IPO

• The shares, which were priced originally around $27.50 each, eventually sold for $33. The interest in the deal partly driven by GM's rebounding fortunes. The company earned $5 billion in the first nine months of the year.

• If it ends up in the black in 2010, which looks likely, it will be the car company's first annual profit since 2004. Uncle Sam poured nearly $50 billion in GM at the height of the recession to save the car company from liquidation.

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GM's initial public offering is set to raise as much as $23.1 billion making it the biggest IPO ever and giving Washington the opportunity to call its bailout of "Government Motors" a success.


SANOFI-AVENTIS MAKES HOSTILE BID FOR GENZYME

• If completed, the French drug maker Sanofi-Aventis' $18.5 billion cash offer for biotech firm Genzyme would be the biggest takeover of the year.

• Sanofi wants Genzyme because of its portfolio of drugs that fight such rare conditions as Fabry disease, which is genetic disorder that typically causes kidney failure in 30-somethings. But the deal is still an if. Genzyme's board of directors says it want Genzyme to up its offer to nearly $24 billion.

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METLIFE PICKS UP A PIECE OF AIG

• One was to sell AIG's international life insurance company Alico to his former employer. The deal generated $16 billion for AIG, of which nearly $7 billion was in cash.

• The rest was in MetLife stock. All told, AIG now has nearly $40 billion in cash, and AIG's stock increased nearly 40% in the first ten months of the year.

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Last year, MetLife's combative former CEO Robert Benmosche took on the job of trying to turn around AIG, and pay back the $130 billion in assistance the insurer got from the U.S. government at the height of the financial crisis. This year he struck a number of deals that gets him a lot closer.


AGRICULTURE BANK OF CHINA GOES PUBLIC

• The deal raised $22 billion, and valued the financial institution at nearly $100 billion, making it among the most valuable banks in the world.

• Ag Bank's IPO was another symbol of China's prosperity. Xiang Junbo, an award-winning scriptwriter and war hero, heads the bank. Ag Bank has 24,000 branches, 441,000 employees and 320 million customers — more than the population of the U.S.

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Last summer's Agricultural Bank of China initial public offering briefly created something that was unthinkable a decade ago: Communist China had produced Wall Street's largest IPO ever. (The GM IPO later topped it.)


UNILEVER BUYS ALBERTO CULVER

• It was a deal with a lot of lather in it. Unilever's $3.7 billion acquisition of Alberto Culver in September bought together the producer of Dove and Pond's with the maker of haircare products TRESumme and VO5.

• Consumer staples do relatively well in weak economies. So it makes sense the Dutch conglomerate would want to expand in an area like shampoos, which for most is a must have household item, even during a recession

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WARREN BUFFETT ACQUIRES A SUCCESSOR

• Todd Combs will leave his job at hedge fund Castle Point Capital Management in Greenwich, Conn., at the end of 2010 to join Buffett's Berkshire Hathaway. But Berkshire is expected to split Buffett's job in two when he retires.

• Buffett helped set up Combs at Castle Point five years ago by finding him seed money from a private equity firm.

• But Buffett may have picked Combs because of what he hasn't invested in. Comb's fund specializes in financial services companies. Yet he has managed to avoid most of the long list of blow-ups of the past three years including AIG, Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers or Washington Mutual. 'Don't lose money' is one of Buffett's classic investment rules.

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The hiring of an investment manager isn't normally big news. But when a 39-year-old hedge fund manager gets picked to eventually replace 80-year-old legend Warren Buffett it makes international headlines.


PRIVATE EQUITY FIRM 3G BUYS BURGER KING

• In late summer, Brazilian private equity firm 3G paid $3.3 billion to acquire the fast food staple Burger King. In part, the acquisition is another sign that the burger business is sizzling.

• Burger King was the second big burger deal of the year. In February, private equity firm Apollo paid nearly $700 million for CKE Restaurants, which owns BK rivals Carl's Jr. and Hardee's.

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The fast food business got a whopper of a deal in 2010

A few years ago, BK's management decided to refocus the chain on its loyal 18-to-34 year-old customers. But that age group has had among the highest rates of job loss during the recession. BK's new owners say they will get growth outside the U.S. Burger King still generates two-thirds of its revenue from the U.S. and Canada.


SOUTHWEST BUYS AIRTRAN

• The deal expands Southwest's geographic reach. Most of AirTran's routes are in the Northeast, where Southwest is unsurprisingly weak.

• Southwest felt it needed to add scale to stay competitive. The need to reduce seat capacity is behind the big deals. For years the industry has had too many planes chasing too few passengers, killing profits. That's changing. For consumers, though, the result will be higher average ticket prices.

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There was more than one sky hook-up in 2010. In a surprise deal, Southwest, the nation's largest low-cost carrier, acquired its smaller rival AirTran for $1.4 billion.


IBM SELLS 1% BONDS

• That fact was solidified this summer when IBM raised $1.5 billion dollars selling bonds bearing an interest rate of just 1%.

• IBM bonds had the lowest interest rate of the more than 3,400 securities in the Barclay's Capital U.S. Corporate Index.

• Two years ago, it seemed all U.S. debt was toxic. Investors were demanding high rates for even the safest of debt offerings. The IBM deal is just another important sign that the economy is slowly improving.

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For corporations looking to borrow, the poor economy and a Federal Reserve policy of keeping rates as low as possible has been a big boon.

**Data Source – Data collected from different public sources of information


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Top 10 business deals of 2010

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