Mergers&Acquisitions - March/99
3/30 Sapient buys Adjacency [for $50.6m], Dow Jones via Bos Globe, D7.
...a [Cambridge, MA-based developer and integrator of] computer software and systems..\..acquired a San Francisco-based Internet consulting firm....
[Onward toward the New American Dream - one humungous company with one employee and everyone else on welfare/in prison - ]
3/26 [Denver-based] New Century [Energies, and Minneapolis-based] Northern States [Power] agree to merge [for $4.9b], Bloomberg via Bos Globe, E2.
...creating the 8th-largest US gas and electric utility with customers in 12 states in the West and Midwest. Utilities are combining to cut costs and compete better in the deregulating power markets. Both companies expect the merger to save $1.1 billion in the first 10 years.
[We feel a cold downsizin' acomin'. Don't the "business" schools teach these birds anything about the longer? Don't they at least hint that they might still need customers when they finish merging? "Cut costs" for why? So Bill Gates can have $200b instead of just $100b? And compete better" for what? For customers? (What else is there?) But there are fewer and fewer of those because you've laid off so many old customers while cutting costs.
[What else is there to compete for, indeed?! We bet a lot of these CEOs don't think in terms of people customers. They get thinking about abstract "markets" just like Vietnam thought about "body bags" and not dead people. They're focused on bagging their rivals and not on the fact that both they and their rivals are squabbling louder and louder for fewer and fewer market scraps - left over from their own silly cuts in jobs instead of hours. Cutting jobs means customers keep decreasing and getting angrier. Cutting hours means customers stay the same. Really cutting hours means customers start increasing and getting happier. Choose one.]
3/26 [Greenwich, Conn.-based] World Color Press buys Westwood printing firm [for $?], Bloomberg via Bos Globe, E5.
...The second-largest North American commercial printer agreed to acquire closely held UP/Graphics Inc...to expand in the Northeast....
[When you guys gonna stop mergin' and start managin'?!]
3/24 Justiced Dept. approves [San Antonio's] SBC [$61b takeover of Chicago's] Ameritech..., Reuters via Bos Globe, D2.
...Regional phone giant..\..SBC Communications...still needs the approval of several states and the Federal Communications Commission [for this deal which they] announced in May 1998..\..The [combined firm] will be required to shed the extra cellular telephone license [in every market where it now owns one from each of its component companies]....
3/24 [St. Louis-based] Charter Communications to buy [for $550m, Englewood NJ-based] Helicon Cable, Bloomberg via Bos Globe, D2.
...A fast-growing cable TV operator owned by Microsoft cofounder Paul Allen plans to buy [a closely held cable company] to expand in the Eastern and Southern United States....
3/24 [NY-based] Citibank to buy [Pittsburg-based] Mellon's credit card business [for $?], Reuters via Bos Globe, D2.
...to fortify its position as the world's leader in cards for consumers [as] the banking arm of CitiGroup Inc., the largest US financial services provider.... Mellon [is] the 18th-largest US banking company....
3/24 [$?] Deal makes bank biggeset investor asset custodian, Bloomberg via Bos Globe, D2.
Bank of New York Co. agreed to buy Royal Bank of Scotland PLC's trust bank....[bought in turn] in March 1997 from SG Warburg & Co.... The businesses will remain in London after the acquisition..\.. The biggest custodian outside the United States will be Deutsche Bank AG, Europe's No. 2 bank, after it completes its acquisition of New York-based Bankers Trust Corp....
3/24 Providence [Equity Partners] buys AT&T languages unit [for $?], Bloomberg via Bos Globe, D9.
...The business, AT&T Languages Line...interprets 140 languages [over the phone for] insurance, health care, financial and utility companies, as well as law enforcement, emergency services and government agencies in the United States and Canada....
[American CEOs continue the destruction of the workforce and their own foundations - ]
3/23 Comcast to acquire MediaOne in $55.5b deal - Merger is industry's second-biggest ever, by Ronald Rosenburg, Bos Globe, C1. [Amount was up to $60b by Sunday 3/28, Globe, F2.]
...yesterday [the nation's 3rd-largest cable company] said it will acquire [the 4th largest to] compete against the likes of AT&T Corp. and Time Warner Inc. in offering television and telephone service and high-speed Internet access.... The...deal is...slightly smaller than AT&T's recently completed acquistion of Tele-Communications Inc. [TCI] for $59.4b.... "Scale is critical, as we are at a point in this industry where very important public policies are going to be settled as important technology choices are made," said Charles M. Lillis, MediaOne's chief executive....
Comcast officials said they expect to save as much as $575 million annually by consolidating headquarters and reducing the combined operation's 34,000-person work force by...5%. Since Comcast has no operations in Massachusetts...no layoffs are planned locally....
[Again, the alternative to cutting their workforce 5% is to cut the corporate workweek by 5% to 38 hrs/wk and keep everyone employed, earning, and spending - as Nucor, Lincoln Electric and VW have been demo-ing. There's no point in efficiency and productivity if CEOs have all the spending power and there are no customers.]
3/23 Vivendi acquires U.S. Filter n $7.9b cash and debt deal, Bloomberg via Bos Globe, C3.
PARIS - ...France's biggest water utility yesterday agreed to buy...the world's largest water-treatment company...to help it gain a bigger share of the global water-treatment market.... The purchase will make Vivendi's water business the world's largest.... The global market for water and wastewater treatment is projected to grow to $500b annually in 2000.
3/23 4 [small] Canadian phone companies unite for $1.86b, Bloomberg via Bos Globe, C2.
...creating a single competitor [the country's third-largest phone-service provider] for all of eastern Canada to rival Bell Canada, the country's largest phone-service provider. The partners in the new company, called AtlanticCo, are Bruncor Inc., NewTel Enterprises Ltd., Maritime Telegraph & Telephone Co. and Island Telecom Inc.... Canada's dissolution in September of the Stentor alliance, a cartel-like group that confined regional carriers within provincial borders, sparked a wave of mergers and acquisitions.
[So, out of the frying pan, into the fire.]
[Hey, a little nationalism even from our own Les Thurow - ]
3/23/99 The selling out of America, by Lester Thurow, Boston Globe, p. C4.
In the last few months there has been a rash of American firms being sold to foreign firms -
[11 more protests about Fleet's takeover of BankBoston - ]
3/22 Letters to the Editor, Bos Globe, A17.
3/19 [Boston-based] Pioneer Group sells venture-capital [business off for $34.9m], Bloomberg via Bos Globe, C5.
...to [Simsbury, Conn.-based] Landmark Partners Inc....
[More tremors from Fleet/BankBoston merger (3/15 below) - ]
3/19/99 Sizing up the deal -
3/18 [Bermuda's] Global Crossing will pay $11.2b for [Rochester, NY-based] Frontier - Century-old phone firm to become part of upstart fiber-optic network, by Ben Dobbin, AP via Bos Globe, C2.
...While [2-year-old] Global Crossing has more than twice the fiber reach of Frontier with 51,000 miles of cable, it's the smaller company by far with just 200 employees and sales of $424 million in 1998.... Frontier, founded in 1899 as Rochester Telephone, has more than 8,000 employees and had $2.6 billion in revenues last year [which] provides local phone service in 32 states and DC..\..
[Sounds like a formula for disaster to us, on two fronts. GC does not "get" long term or thousands of employees. How could Frontier be so stupid? Stay tuned for trouble.]
Frontier sprouted beyond its roots as a local phone monopoly...by buying more than a half-dozen long-distance carriers in the 1990s and becoming one of the nation's top 10 long-distance providers [competing] with...AT&T, MCI and Sprint by serving small and medium businesses..\.. Then in 1996 it paid $500m for part of a national fiber-optic network being built by Qwest Communications International - a pittance by today's values....
[After many vicissitudes involving US West and Qwest, Global Crossing finally got Frontier for $10.5 billion on 9/02/99 because of a "plunge in Global Crossing's shares." See NYT 9/03/99 p. C3 "Frontier accepts revised offer from Global Crossing."
3/18 AOL completes [its all-stock] $10b acquisition of Netscape, AP via Bos Globe, C2.
...after Netscape shareholders voted overwhelmingly in favor of the deal, removing the last remaining hurdle. The Justice Dept. said last week it wouldn't oppose the takeover....
[See our main story below on 3/13. Note the money involved has somehow swollen from $4.2b to "nearly $10 billion." If we had to pick one, we'd go with the $4.2b on the scribal principle that "the more difficult reading prevails" (legius difficilior potest). Was today's very-round-figure reporter just too lazy to check the exact figure or did the deal really more than double in value over the last 5 days?]
3/17 Bread & Circus owner buys Nature's Heartland [for $25m], by Chris Reidy, Bos Globe, D9.
Whole Foods Market Inc., the Austin, Texas company that operates six Bread & Circus stores locally, has agreed to buy...a natural-food chain with stores in Bedford, Bellingham, Newton, and Wayland [Mass. and] change their name to Bread & Circus....
3/17 CRA buying L.A. firm for $3.2m in cash, stock, by Brian O'Neill, Bos Globe, D4.
Charles River Associates [Boston-based] said it has acquired the FinEcon financial consulting firm. 3/16 DuPont to buy seed firm Pioneer [HiBred] for $7.7b - Deal could lift role of genetics in food production, Reuters via Bos Globe, C2.
3/16 Gas pipeline firms [El Paso Energy & rival Sonat] join in $5.5 billion merger, Bloomberg News via Bos Globe, C2.
...creating the largest interstate natural-gas pipeline company in the country....
3/16 Omnia Communications to be sold for $429 million - Md. firm [Ciena] buying Marlborough tech company, by Hiawatha Bray, Bos Globe, C3.
[Another bizarre side-effect of mergers - ]
3/16 Will [Fleet etc.] bank merger help or hinder arts funding?, by Patti Hartigan, Bos Globe, D1.
When Jill Medvedow heard about the merger...she wasn't worried about checking fees or access to ATMs. Instead, the Institute of Contemporary Art director pondered the impact on corporate funding for the arts [and on the BankBoston Celebrity Series]. "I'm alarmed that there is one less corporate entity in the city," she said yesterday, echoing a concern voiced by many arts administrators after New England's two largest banks announced the merger. In the past decade, corporate mergers have diminished the pool of resources available to the arts community in a city that is notorious for its meager corporate support for the arts.
[So what? We heard recently that Boston has more arts events per capita than any other American city. Why do the arts expect "support," especially from corporations whose mission is arts-irrelevant? Let's get back to the quintessential difference between art and art therapy, namely, "Does it sell?"
[Isn't it strange how, over the years, the arts, of all things, have become the world's biggest charity case, that we're all supposed to feel guilty for not "supporting"? And in the thickening encrustation of art institutes and arts administrators and arts communities, we find a lush habitat of luxurious lifeforms transmitting the message, "You owe us a living." Let's get back to the old Irish way - "Every man his own artist and poet."]
3/16 One big consequence of [Fleet etc.] banks' merger mania: bounced customers, by Bruce Mohl, Bos Globe, C4.
[But then, who can remember when banks, or any of the American service sector for that matter, gave a damn about...yuk...customers? Retail establishments are now staffed by teenagers, and God forbid we should interrupt their vital conversations with our desire (flagging) to buy something.]
3/15/99 Fleet to acquire BankBoston, $16b stock deal will create nation's 8th-largest bank [and New England's largest??], by Lynnley Browning, Bos Globe, front page.
[For full details, see story of this date (3/15/99) on our banking page. Followup - "Rough seas, new course - Back to meat and potatoes - Fleet to cut divisions, focus on core banking business," by Steven Syre, 4/17/2002 Boston Globe, D2 - see 4/17/2002 #1.]
3/13 Justice Dept. gives AOL green light for $4.2b buy of Netscape, Reuters via Boston Globe, p. A9.
...The move prompted Microsoft Corp. to declare that the decision made the government's ongoing antitrust case against it irrelevant, a view the government rejects. Aol's flagship on-line service has 16m subscribers and its CompuServe service has 2m more. Netscape, best known for its Web browser, brings to the table its popular Netcenter Website and an army of Silicon Valley programmers who have made it a leader in providing software for Internet communications and commerce....
[Oh great. Now the big question for Navigator fans is, which browser parent do they hate more, Microsoft or AOL.]
3/12 [Everett, Mass.-based] Daniels Printing bought by Minn. firm [for $undisclosed], by Jennifer Babson, Bos Globe, C5.
...New England's largest financial and corporate printing company has agreed to be acquired by Merrill Corp., a...document and information management company.... The company will be renamed Merrill/Daniels pending regulatory approval....
3/11 Reliant Energy buys Dutch utility [Energieproduktiebedrijf UNA for $2.24b], Bloomberg via Bos Globe, D2.
...Owner of Texas' second-largest utility [which last month changed its name from Houston Industries] agreed to buy the third-largest power producer in the Netherlands...which provides 20% of the Netherlands' electricity [and is currently owned by four Dutch city governments].
[Watch out, ye Dutch! Current economic theory is neither stable nor long-term enough to support baring your jugular to foreign powers, especially this one.]
The European Union has ordered 12 countries to open 25% of their electricity markets to competition....
[Well, they were stupid not to restrict it to European competition.]
Houston-based Reliant is the first US company to purchase a European electric utility since the EU on Feb. 19 ordered all but three of its 15 members to open their markets.
[And let's hope it's the last.]
3/11 CMGI agrees to sell Direct unit to N.Y. firm [for $undisclosed], by Greg Chang, Bloomberg via Bos Globe, D15.
NEW YORK - Marketing Services Group Inc., a provider of telemarketing and direct-marketing services, agreed to buy [Andover MA-based] CMGI Inc.'s...unit [that] makes software for automated on-line marketing and for maintaining direct-mail databases....
3/10 Supermarket giant [Royal] Ahold to buy Pathmark [Stores] in $1.74b deal, by Chris Reidy, Bos Globe, C3.
Continuing rapid consolidation in the $436 billion US grocery industry, the Dutch parent of Stop & Shop Cos. said yesterday it plans to cement its position as the largest grocer on the East Coast.... A look at a supermarket's balance sheet helps explain why the giants are snapping up smaller players at a rapid pace. As a percentage of profits, supermarkets tend to have miniscule profits - about 1 to 2% on average. With such narrow margins, supermarket chains [think they] need size to hold down distribution costs and increase their buying power...
Wal-Mart Stores Inc., a $139 billion behemoth, looks to take a greater share of the US consumer's food dollar [and] seems to have spurred consolidation. Recent deals include Ohio-based Kroger Co.'s merger with Fred Meyer Inc.; Idaho-based Albertson's plan to combine with American Stores of Utah; and Ahold's purchase of Giant of Landover, Md.... The purchase of Pathmark could boost Ahold's annual US revenues...to $25 billion...still...behind Kroger, Albertson's, Wal-Mart, and Safeway Inc.... "Strong regional players are being gobbled up by the big conglomerates," said [Paul Weitzel, director of Illinois-based Willard Bishop Consulting]. "In two or three years, there won't be any left."
[Is anybody doing studies on the secondary flattening of consumer markets occasioned by the efficiencies of such rapid consolidation?]
3/10 Parametric Technology pays $79m for Auxilium, Bloomberg via Bos Globe, C7.
...the [Waltham MA-based] number one maker of [CAD-CAM] software yesterday acquired...[Minnesota-based maker of Internet-based InfoEngine] software technology [that allows companies] to share data from different computer [networks and] systems.
[Those who can't manage keep buying up those who can - ]
3/09 Allied Waste to buy rival Browning-Ferris - $9.1b deal to create No. 2 disposal firm in US, Bloomberg News via Bos Globe, C2.
SCOTTSDALE, Ariz. - ...the number three US waste disposal firm said it will buy...the second-largest.... The combined company, with annual revenue of $6.6 billion, will [still] rank a distant second to Waste Management Inc. [which was bought in July by USA Waste Services for $24.9b]....
[So much for free-market competition. [We think that eventually there will be huge taxes on mergers and acquisitions to keep these bozos "taking care of business" instead of constantly looking around for a free lunch.]
3/09 [For $4.1b in stock, NYC-based] CIT to acquire [Toronto-based] Newcourt Credit, Bloomberg via Bos Globe, C2.
...a 91-year-old lender [to consumers and businesses] that first financed horse-drawn carriages [agreed to buy] North America's number two nonbank business lender..\..creating the largest publicly owned finance company with $50 billion in assets....
[The price got revised downward in August to $1.8B because Newcourt, a Canadian leasing company, turned in a disappointing quarterly performance in mid-June. See article Revised deal for Newcourt in 8/06 NYT p. C4.]
3/09 Fortis to buy American Bankers [for $2.8b], Bloomberg via Bos Globe, C2.
...Belgium's largest financial company...has been expanding outside its home markets in Belgium, the Netherlands, and Luxembourg [and will buy a Miami-based insurance company to become the biggest insurer of consumer and credit-card loans in the United States].... Since 1997, Fortis has spent $1 billion buying US companies in niche markets [such as funeral insurance and small-firm health insurance]....
3/09 EG&G to buy Perkin division [for $425m], by Ross Kerber, Bos Globe, C3.
Wellesley-based EG&G..\..plans to acquire an instruments unit from Perkin-Elmer Corp...with about 6,000 employees scattered around the country..\..part of a strategy to concentrate on commercial businesses with higher profit margins....
[Alas, the historical formula for depression grows ever clearer - Fewer and huger companies with ever more astronomically paid CEOs scramble for fewer and higher profits in shrinking preserves of still-healthy markets.]
3/09 Siemens acquires 2 Mass. firms [for $240m + $310m], by Ronald Rosenberg, Bos Globe, C1.
...The giant [Munich-based] telecommunications and electronics firm...acquired...Argon Networks Inc. of Littleton, a 2-year-old developed of data switches, and Castle Networks Inc. of Westford, which builds networking equipment that can more easily separate voice and data calls.... The three companies, along with some existing Siemens operations in Florida, Canada, and Germany, will become the core of a new, wholly owned [Burlington-based] subsidiary called Unisphere Solutions Inc. [which] will have 500 employees, most of whom will continue to work at existing facilities and at Siemens plants....
Howard Anderson [analyst, feared that Siemens was three years late] in pursuing its data networking and Internet strategy, following competitors such as [Lucent, Nortel, and Cisco. In Jan., Lucent bought Ascend and last year, Nortel bought Bay Networks]....
3/09 Daley will sell Back Bay [Hilton back to Hilton for c. $80m], by Richard Kindleberger, Bos Globe, C1.
...The hotel deal will give the Hilton chain its first downtown Boston hotel since it sold the Statler-Hilton, now the Park Plaza Hotel, in 1976....
3/06 Adelphia Communications to buy Century [Communications] in $5b deal, Bloomberg via Bos Globe, F1.
...snatching up its second cable-television company in two weeks...for $4.96 billion in stock, cash and assumed debt to expand in California, Colorado and Puerto Rico [from] the mid-Atlantic region and Florida.... The acquisition, Adelphia's largest ever, follows its planned buyout of FrontierVision Partners LP and is the latest move by chairman John Rigas to build Adelphia into the fifth-largest US cable company.
[See, these guys like bigness, and most of them haven't yet figured out that downsizing their workforces instead of their workweeks limits their bigness.]
3/06 Au Bon Pain slices itself in two, by Chris Reidy, Bos Globe, F1.
...The company's stockholders approved the sale of its Au Bon Pain cafe division to an affiliate of New York investment firm Bruckmann Rosser Sherrill & Co....
3/05 AT&T Canada, MetroNet agree to [$4.6b (C$7b) merger], Reuters via Bos Globe, E2.
TORONTO -...creating what is expected to be a formidable new coast-to-coast competitor in Canada's fast moving phone market. The new company, to be called AT&T Canada Corp., will have annual revenues of about $1.4 billion [and] 4,000 employees and C$3.5 billion in assets....The merger, approved by both boards, still needs to be sanctioned by MetroNet shareholders, regulators, the courts....
3/05 Intel will buy Level One i $2.11 billion stock deal - Seeks to enter market for networking-equipment chips, Bloomberg via Bos Globe, E4.
SANTA CLARA, CA - ...the world's largest chipmaker agreed to buy...the Sacramento-based [maker of] communications chips...used by most large network-equipment makers to reduce [costs]....
3/05 CMGI buys Texas firm [Activerse, for $undisclosed], Bloomberg via Bos Globe, E7.
...An [Andover, Mass.-based] Internet venture-capital company said yesterday it will buy closely held [Austin-based developer of] Internet communications tools.... Activerse's Ding software allows live communication over the Internet, known as instant messaging [which it] hopes to make...as commonly used as email.
[Oh Yeah! - another exciting episode of "Too little brains with too much money chasing too shaky markets" - ]
3/04 Concentra to be sold for $1.1b - N.Y. investment unit buys health-care firm, by Jennifer Babson, Bos Globe, D1.
Boston-based Concentra Managed Care Inc. yesterday said it would be bought by a unit of Welsh, Carson, Anderson & Stowe...which currently manages more than $7 billion in private equity capital primarily in the health care and information services industries. The firm was an early investor in OccuSystems Inc., which merged with CRA Managed Care in 1997 to form Concentra. Last year, Welsh, Carson purchased Centennial Healthcare Corp. of Atlanta for $290 million, a few months after it joined forces with Kohl Kravis Roberts & Co. to buy Medcath Inc. of Charlotte, N.C....
Concentra last year went on a Wall Street roller-coaster ride, its stock plunging more than 80% from a peak in January, when more than a dozen brokerkage analysts dubbed it a "best buy"....
[And can we sue these guys for malpractice yet? No-o-o. But if we flop big enough, the Fed will come and bail us out.]
3/3 France's Alcatel pays $2b for US Net equipment firm - Deal for [Calif.-based] Xylan seen expanding firm's data-networking presence, by Melissa Pozsgay, Bloomberg News via Bos Globe, C2.
PARIS -...Europe's number-two phone equipment maker, yesterday agreed to buy Xylan Corp...to acquire sophisticated Internet equipment and expand its presence in the US computer-networking market.... Because it failed to keep pace with offerings from rivals such as number one phone-equipment maker Lucent Technologies Inc., Alcatel's sales dropped.... In January, Lucent agreed to acquire Ascend Communications Inc., the number four networking-equipment maker [for] about $20 billion.
Alcatel has been on a buying spree [for example, its] Dec. 14 acquisition of Packet Engines Inc., a closely held computer-networking company based in Spokane, Wash., for $315 million in cash. It also bought DSC Communications Corp. of Plano, Texas, in September for $4.4 billion in stock....
3/02 GEC agrees to buy Reltec for $1.7b - UK firm gains network foothold [in rich North American market], Bloomberg via Bos Globe, D2.
LONDON - ...one of the UK's biggest manufacturers agreed to acquire US-based [maker of devices that help local phone networks carry more calls] as it expands into telecommunications....
3/02 Duke Realty buys Weeks [Corp.] for $1.07b, Bloomberg via Bos Globe, D2.
...One of the Midwest's largest commercial real estate developers agreed to buy [why are they starting to make this sound like somebody's twisting their arm?] rival real estate investment trust...to expand in the Southeast....
3/02 State Street purchases N.Y. brokerage firm [Elkins/McSherry for $undisclosed], by Lynnley Browning, Bos Globe, D9.
3/02 CMG awaits 2 IPOs; announces acquisition [of Internet Profiles for $undisclosed], Bloomberg via Bos Globe, D9.
3/02/99 Lynch Murphy Walsh bought by N.Y.'s [Insignia/ESG for $undisclosed], by Richard Kindleberger, Boston Globe, p. D9.
For earlier Mergers&Acquisitions, click on the desired date -
For more details, our laypersons' guide to our great economic future Timesizing, Not Downsizing is available at bookstores in Harvard Square, Cambridge, Mass. or from *Amazon.com online.
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