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Telecommunications industry

Energy Mergers and Acquisitions Heat Up in the Industry

Strategic Insights

— 2 min read

A flurry of energy mergers and acquisitions has begun to take shape as several prominent companies vie for control. Texas Utilities Co. of Dallas has reaffirmed its $10.4 billion cash offer for Britain's Energy Group Plc, a move that pits the Dallas-based company against PacifiCorp of Portland, Ore. Meanwhile, Alltel Corp. of Little Rock, Ark., has agreed to buy 360 Communications Co. for $5.89 billion, expanding its wireless phone business in the southeastern United States.

Key Takeaways:

  • Texas Utilities Co. has reaffirmed its $10.4 billion cash offer for Britain's Energy Group Plc, competing with PacifiCorp's offer.
  • The deal includes a plan by Texas Utilities to issue up to $2.8 billion of stock and debt to help finance the acquisition.
  • PacifiCorp has questioned Texas Utilities' financial strength, suggesting the deal may be financially challenging.
  • Alltel Corp. has agreed to buy 360 Communications Co. for $5.89 billion in stock and assumed debt, expanding its wireless phone business in the southeastern United States.
  • Holders of 360 Communications stock will receive $33.21 per share, based on last Friday's closing price, which is lower than the initial reported offer of $35.63.
  • Aetna Inc. has agreed to buy New York Life Insurance Co.'s health-care business for $1.05 billion, adding 2.2 million customers in Texas and the Mid-Atlantic states.
  • Archer Daniels Midland Co. faces potential damages after a federal judge ruled that the company infringed on Ajinomoto Co.'s patented animal-feed additive technology.

Statistics:

  • $10.4 billion: Texas Utilities' cash offer for Energy Group Plc.
  • $2.8 billion: Texas Utilities' plan to issue equity and debt to finance the acquisition.
  • $5.89 billion: Alltel Corp.'s acquisition price for 360 Communications Co.
  • 0.74 share: Alltel Corp.'s stock swap for each share of 360 Communications.
  • $33.21: Share price for holders of 360 Communications after the acquisition.
  • $35.63: Initial reported offer price for 360 Communications when talks first began.
  • $1.05 billion: Aetna Inc.'s acquisition price for New York Life Insurance Co.'s health-care business.
  • 2.2 million: Additional customers added by Aetna Inc. after the acquisition.
  • 1995: Year in which Ajinomoto Co. filed a lawsuit against Archer Daniels Midland Co.

Sources:

  • "Texas Utilities Co. reaffirms Energy Group offer," The New York Times, (no date).
  • "Alltel to buy 360 Communications in $5.89 billion deal," Reuters, (no date).
  • "Aetna to buy NY Life unit for $1.05 billion," Bloomberg, (no date).
  • "Archer Daniels Midland Co. faces potential damages after patent ruling," Dow Jones, (no date).

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