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[Commentary] ©1999-1999 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080

Mergers&Acquisitions - Jun.16-30/99

6/30/99  Eighteen Takeovers (our personal daily record since our tracking began):

[First, frontpage, but #0 because counted on 3/24 - ]
0.  $72b telephone: $72 billion deal of phone giants clears big hurdle: Tentative nod from U.S. - Ameritech-SBC would have to expand to new cities and welcome competitors, by Stephen Labaton, New York Times, front page.

  1. $2.3b Internet: CMGI buys most of AltaVista, by Ross Kerber, Boston Globe, p. F1.

  2. $1.9b investments/advertising printing: 2 Investment firms to buy Big Flower..., Bridge News via NYT, C4.
    ...The largest printer of advertising inserts in the U.S. said yesterday that it had agreed to a...buyout by...the Thomas H. Lee Co. of Boston and Evercore Capital Partners LLC, which is headed by Robert Altman, the former Deputy Treasury Secretary....

  3. $843m telephone: GTE is in $843.3 million deal with CenturyTel, AP via NYT, C4. for GTE's local-exchange telephone services in Arkansas.... The the most recent in GTE's previously announced initiative to sell about 1.6 million telephone lines.

  4. $435m data networking/semiconductors: Cisco in $435 million deal for communications concern [Stratumone Communications], Dow Jones via NYT, C4.

  5. $425m banking: Hudson Bancorp to pay $425 million for 2 banks [Jeffbanks and Southern Jersey Bancorp], Bloomberg via NYT, C4.

  6. $355m utilities: Energy East is seen in deal to acquire CTG Resources, by Laura Holson, NYT, C2.

  7. $255m communications towers: Pinnacle agrees to buy 1,850 towers from Motorola, Bloomberg via NYT, C4.

  8. $240m accounting: H&R Block is in deal for most of McGladrey & Pullen, Reuters via NYT, C4.

  9. $83m cellular phones: CommNet Cellular to sell Iowa stakes [to Midwest Wireless Communications], Bloomberg via NYT, C4.

  10. $75m Mex-Tex telephone: Purchase by Telmex, by Rick Wills, NYT, C4.
    Mexico's largest phone company, Telefonos de Mexico, purchased the Dallas-based Comm South Companies, a local service telephone company with 177,000 clients. [The deal was] made through the Telmex subsidiary Topp Telecom Inc. [and] is the Mexican company's fifth major foreign takeover this year. Three acquisitions were in the United States, while the other two were in Puerto Rico and Guatemala.
    [So Puerto Rico isn't in the United States?!]

  11. $37m railroading: Agreement to buy railway, Bloomberg via NYT, C7.
    BOCA RATON - Rail America Inc., which runs 14 railroads in the U.S., Canada, Australia and Chile, has agreed to buy the 369-mile Toledo, Peoria & Western Railroad for $24 million in cash, its largest U.S. acquisition. [Plus] it will buy the outstanding stock...from CSX, Norfolk Southern and other shareholders by July 31. Rail America, which is based here, will also receive the line's locomotives, cars and equipment.
    [Great, any steam locos?]

  12. $? equipment rental: United Rentals buys 12 companies; plans to sell shares, Dow Jones via NYT, C4.

  13. $? investments: Waddell & Reed to acquire a Texas investment firm [Austin, Calvert & Flavin], Dow Jones via NYT, C4.

  14. $? building materials: Stonegate Resources LLC, NYT, C4.
    ...Dallas, said its BSL Holdings unit, the No. 3 U.S. distributor of building materials...had agreed to buy Paty Lumber....

  15. $? marketing services: Lighthouse Holdings buys Primo Angeli, NYT, C8.

  16. $? systems integration/application outsourcing: Breakaway Solutions buys WebYes..., by Brian O'Neill, Bos Globe, F4. Breakaway...acquired the companies last month.... [But we didn't catch and count them then.]

  17. $? systems integration/Internet consulting: Breakaway Solutions buys...WPL, by Brian O'Neill, Bos Globe, F4. Breakaway...acquired the companies last month.... [But we didn't catch and count them then.]

  18. $? systems integration/application services: Breakaway Solutions buys [Applica], by Brian O'Neill, Bos Globe, F4. ...The acquisitions follow Breakaway's March merger with Applica Inc.... [But we didn't catch and count it then.]
[And lest you say, "No fair counting last months' mergers just because they surfaced today in the press and you didn't count them before", let's look in a Globe article today that surfaces six more mergers we didn't count before. Here, in reverse chronological order, is just one firm's (Tyco International's) one-year list of takeovers, only three of which we picked up and counted (Raychem, Alarmguard & AMP) - ]
  1. Jun 16 $115m Central Sprinkler
  2. May 19 $2.87b Raychem
  3. May 19 $280m Temasa
  4. Feb 25 $233m Glynwed
  5. Jan 11/99 $51m Alarmguard Holdings
  6. Dec 15/98 $237m Entergy Security Corp.
  7. Nov 23 $11.3b AMP Inc.
  8. Nov 23 $85m Sunbelt Plastics
  9. Sep 22 $460m Graphic Controls Corp.
[The article is:]
6/30 The quiet giant - Tyco International takes unglamorous road to riches, by Syre and Stein, Bos Globe, F1.
[This article is about Dennis Kozlowski, a robopathic takeover artist who is CEO of Tyco International, not to be confused with Tyco Toys. We don't agree that his road to riches in unglamorous. It's so totally fashionable right now. Has been for the last 15 years. Was during the Roaring '20s too, just before the Great Depression. Several of Kozlowski's takeovers resulted in major downsizings (e.g., 8,200 mentioned on 4/13 by AMP Inc. alone). Plus Kozlowski got his start with Joseph Gaziano, one of the original greenmailers of the '70s. All you can say good for the guy is, he doesn't do hostile takeovers and the only cost-cutting mentioned in this fawning article gives him the appearance of egalitarianism - he once cut a company's executive jet fleet. If Syre and Stein want CEO heros, how about looking to VW, Nucor or Lincoln Electric who maintain jobs and spending and markets instead of reaming them like hack Kozlowski, or even let them look at guys like Bill Wolf who create and incubate companies and then spin them off? But let's parachute into this article and get some of the flavor, sweet and sour...]
...Tyco, unofficially based just over the state line in Exeter [NH], has spent more than $25 billion on an acquisition tear over the last two years. Today, the low-profile conglomerate...has a stock market value worth more than those of Gillette...and Raytheon...put together.
[It's always better if your success, such as it is, was somehow unintended - if you got drafted, as it were. Bingo - ]
"I never started be a $76 billion company," said Kozlowski, referring to Tyco's stock value. "But I always envisioned one that had to grow every year in order to be successful and satisfy shareholders."
[Here's the usual self-righteous cant about prioritizing the absentee owners, who may be shareholders but sure aren't stakeholders. They're nothing but quicksilver capital.]
Now, the combined revenues of Tyco's companies may reach an annual rate of $25 billion by the end of the year and its army of employees number about 80,000. Billions in cash flow from those businesses and fund many acquisitions, while other deals are paid for in stock or borrowed money. For all the [vastness] of its businesses, Tyco's corporate operations remain practically skeletal. The Tyco staff in Exeter number 70.... Annual meetings [are held] near Tyco's official headquarters in...Bermuda.... Kozlowski has enjoyed rewards as well, including a compensation package last year valued at as much as $74.4 million..\..
[Same old story - colossal failure to reinvest and centrifuge wealth, something the future will do dynamically and automatically so we never come within a zillion miles of a market collapse. Today we still have the braindead appropriation, by a tiny minority, of the prerogative of infinite incentive. What babies our executives - and ourselves! You can't blame Kozlowski. It drags on as the central glaring blindspot of the still dominant management and economic paradigm.]
...Shareholders have had little to complain about [with] Tyco, a stock that has nearly quadrupled in the last three years.... Tyco's companies are organized into four operating groups and all new acquisitions fit into one of those business lines.
  1. pipes, fittings, flow meters, and industrial equipment
  2. fire and security services
  3. disposable and specialty healthcare products
  4. electrical and electronic components
[Does anybody see a pattern here? Why not add burgers and fries? And Syre and Stein want to give him points for the 'discipline' of making all new acquisitions fit into one of these four random business lines??!]
Tyco executes big acquisitions month after month by following several rules without fail. The two big musts: never do a hostile deal and cut costs aggressively so new acquisitions do not drag down Tyco's earnings. Kozlowski got an up-close look at the wreckage hostile deals create long ago, when he first joined Tyco and...running the company [was Joseph] Gaziano, one of the original greenmailers of the 1970s.... "Good people had migrated out of [one company that Gaziano acquired in a protracted hostile takeover] and we were left picking up the pieces," said Kozlowski. "Hostiles never made a lot of sense to me."
[Well, that's a plus. This puts him one rung above Chainsaw Dunlap on the evolutionary scale. But takeovers go on, and on....]
...Kozlowski believes that more acquisitions, probably at the same pace of about 10 per year, will continue for now. "There's absolutely no finish line," he said.
[Syre and Stein hold up Kozlowski as a great manager. Therefore he is a good example to take and contrast with the good managers of the future - because if the future is only better than the worst of the present, so what?! But if it is better than the best of the present, then we've really had some progress.
[So taking Kozlowski as the best of present-day management, how will the future judge him? We believe the future will judge Kozlowski as a bad manager with no long-term view. He prioritizes the absentee 'owners' who hold stocks (however briefly) over the other members of his own company, otherwise known as employees. He confusedly thinks efficiency is meaningful when people are losing their livelihoods. In fact, he takes this kind of nightmare efficiency as his goal and proceeds to rob people, regardless of their performance, of their sense of control over the most important thing in their lives, their income.
[This is not good management. It demoralizes your stakeholder employees while enriching your absentee shareholders and yourself - but only temporarily, because by not cutting hours for all, but jobs for a few, and a few more, and a few more, you are concentrating wealth and cutting your own markets. The more concentration, the less circulation. Kozlowski has not solved the core conundrum of current economics - how do I increase efficiency without demoralizing my own staff (who are part of the economy's aggregate spending function) and without downsizing, directly or indirectly, my own markets? We're afraid we can't regard anyone who hasn't solved this one as a great manager, and the future won't either. For really great managers today, whom the future too will judge so, we must look to Volkswagen, Nucor, and Lincoln Electric, all companies that manipulate their workweeks instead of their workforces.]

6/29  Eleven Takeovers:

  1. $4.1b water treatment/chemicals: Big French water company to acquire Nalco Chemical, by Claudia Deutsch, NYT, C2 (NE).
    In a deal that will create the world's largest water treatment company, Suez Lyonnaise des Eaux SA of France will acquire Nalco Chemical Co.... Job cuts will certainly be part of the equation but the ax is not likely to hit hard in Napierville, Ill., Nalco's headquarters..\.. The deal...comes at a time of rapid change among water treatment companies.... In the last couple of years, Hercules has bought Betz Dearborn, Ciba Specialty Chemicals bought Allied Colloids of Britain, and Vivendi SA, Suez' main rival in France, bought US Filter. Two weeks ago Suez itself said it would buy the Calgon Corp., a Pittsburgh water company....

  2. $1.63b engineering/construction equipment rental: Atlas Copco outbids United Rentals for Rental Service Corp., Reuters via NYT, C4.
    ...A Swedish engineering company said yesterday that it had agreed to acquire...a construction equipment rental company for $730 million.... Atlas Copco said it had agreed to pay $29 a share for Rental Service and assume $900 million in its debt....

  3. $1.28b energy utilities: Wisconsin Energy to buy rival [Wicor Inc.], Reuters via NYT, C4.

  4. $647m electronics distributors: Avnet to buy electronics distributor [Marshall Industries], Dow Jones via NYT, C4.

  5. $274m casinos: Boyd Gaming to buy Lake Michigan Riverboat Casino, Bloomberg via NYT, C4.

  6. $250m electric motors: A. O. Smith to buy electric motor unit from Magnetek, Bloomberg iva NYT, C4.

  7. $165m communications towers: American Tower to buy Unisite, a rival..., Dow Jones via NYT, C4.

  8. $150m credit cards: MBNA Corp., NYT, C4.
    ...Wilmington, Del., the nation's thrid-largest credit card issuer, agreed to buy the $150 million credit card portfolio of CCB Financial Corp., based in Durham, NC.

  9. $100m electronic commerce: USA Global to buy CVF Technologies..., Bloomberg via NYT, C4.

  10. $47m banking: FirstFed Financial to buy niche bank..., Dow Jones via NYT, C4.
    ...Professional Bancorp Inc...the parent of First Professional Bank, which provides financial services for healthcare professionals. Under terms of the deal, FirstFed will also acquire privately held Network Health Financial Services....

  11. $? air cargo: U.P.S. makes deal for Latin expansion, Bloomberg via NYT, C10.
    ...[by arranging] to buy the assets of Challenge Air Cargo [including] takeoff and landing rights in the region, Challenge Air's 1,200 employees and ground operations and equipment in Miami and Latin America....
    ["The assets being purchased include...Challenge Air's 1,200 employees...." Hmmm. Challenge Air "has" 1200 people dependent on it for their livelihood. It can sell "assets," including them. What is this but the indirect buying and selling of people - Indirect Slavery? Eventually this kind of cavalier "pain without input" will be designed OUT of our lives, but it will take a lot greater sensitivity and self-respect on the part of the population at large.]
6/26  Ten Takeovers:
  1. $900m telecomms: Lucent to buy Nexabit in $900m deal, by Ronald Rosenberg, Bos Globe, F1.
    [NYT folds into:] 3 Companies and 3 angles on changing small to big, by Seth Schiesel, NY Times, p. B1 (NE).

  2. $730m tissue: Georgia-Pacific and Chesapeake to combine tissue units, Bloomberg via NYT, B3.
    ...[Chesapeake's named] Wisconsin Tissue....

  3. $644+m real estate: Whitehall to buy real estate partnerships from McNeil, Bloomberg via NYT, B3.
    Whitehall Street Real Estate LP agreed yesterday to buy 19 real estate partnerships from McNeil Real Estate Management Inc. for $644 million in cash and the assumption of mortgage debt.... McNeil decided to look for a buyer last year after fighting off a hostile tender offer for the partnerships from Carl C. Icahn.
    [One bad apple can spoil a whole bunch.]

  4. $310m champagne: Champagne makers sold, AP via NYT, B2.
    In its latest move to sell assets and pay down its $8.5 billion debt, the Seagram Co....
    [And that huge debt was incurred probably from an ill-advised acquisition, n'est-ce pas? So what's the point of acquiring something to grow if you then have to sell off and shrink to pay for it??? Do any of you out there get the feeling that these CEOs are just bored stupid?]

  5. $309m bottling: Pepsi-Cola Puerto Rico agrees to buy two bottlers, Bloomberg via NYT, B3.
    ...Delta Beverage Group Inc. of Memphis and Dakota Beverage Co. of Fargo, ND, both closely held.... The combined company would be Pepsico's third-largest bottler behind Pepsi Bottling Group Inc. and the Whitman Corp. Pepsi has been promoting consolidation among its bottlers to speed distribution of its products and reduce marketing costs....
    [Oh? We thought competition did that.]

  6. $231m high tech: Answerthink Consulting agrees to buy Think New Ideas, Bloomberg via NYT, B3.
    [Both firms' shares fell. Wakey wakey, boys!]

  7. $150m medical staffing: W. R. Grace to...sell a medical staffing company, Bloomberg via NYT, B3.
    ...Cross Country Staffing, the largest medical staffing company in the United Cross Country's management and a private equity firm Charterhouse Group International Inc.

  8. $54m ditto (in and out): W. R. Grace to buy...a medical staffing company, Bloomberg via NYT, B3.
    ...Nestor Healthcare Group PLC's stake in Cross Country Staffing.... Nestor [is] Britain's biggest nursing employment agency....
    [So why, you ask, doesn't Nestor just sell Cross Country to mgmt and Charterhouse itself, cut out the middleman and pocket 150m instead of just 54m? Because they've only got a minority (34%) stake to sell, and it seems that Grace has at least enough stake of its own to give it majority control when it adds Nestor's 34%, the Times doesn't condescend to tell us exactly how much. And it's this newly forged majority control that it's selling to mgmt and Charterhouse for the $96m premium.]

  9. $112m meatpacking: IBP to buy Thorn Apple Valley for $112 million, Bloomberg via NYT, B3.
    Thorn Apple Valley Inc...was forced to seek bankruptcy protection after recalling about 30 milllion pounds of possibly tainted meat.... IBP, the world's largest meatpacker, will keep Thorn Apple's plants open and retain the company's employees.... Thorn Apple, a maker of bacon, hot dogs and lunch meat, filed for protection under Chapter 11 of the bankruptcy code on March 5....
    [This one illustrates the frequent link between bankruptcy and takeover, though hopefully not the further link to downsizing.]

  10. $undisclosed, window blinds: Hunter Douglas to purchase Comfortex, Bloomberg via NYT, B3.
    ...Comfortex...employs about 500 people [in NJ]. Hunter Douglas [based in Holland] has about 13,500 employees and operates 136 companies in more than 80 countries.

6/25  15 Takeovers! = The Slippery Slope:  Merge, compress, compact, contract, seek markets (gee, why so flat, duh??);  So, seek market share;  Via, merging, compressing, compacting,...
  1. $1.7B news publishing: Gannett agrees to buy Newsquest for $1.68b, Bloomberg via Boston Globe, p. F2.

  2. $720m HVAC: United Technologies is buying International Comfort, Dow Jones via New York Times, p. C3 (YNE) =
    UTC's Carrier unit to buy [Nashville-based] International Comfort, Bloomberg via Bos Globe, E2.
    [HVAC = home ventilation & air conditioning. Carrier is the #1 maker of air conditioners.]

  3. $649m Euro investing: Pearson will sell its stakes in the 3 houses of Lazard - Part of effort to focus on media businesses, by Dana Canedy, NY Times, C2.
    The British media company Pearson PLC said yesterday that it was selling its holdings in three Lazard investment the French investment group, Gaz et Eaux SA [including] its 50% stake in Lazard Brothers & Co. in London....

  4. $644m metal castings: Citation agrees to be acquired by closely held Kelso, Bloomberg via NYT, C3.

  5. $638m oilfield services: Tuboscope agrees to buy Newpark Resources, Bloomberg via NYT, C3.

  6. $580m Eurobanking: Polish bank purchase, by James Clarity, NYT, C2.
    Ireland's largest bank, Allied Irish Banks PLC made another major investment in Polish banking and...bought 80% of Bank Zachodni....

  7. $445m infotech services: Data Processing shares rise 91% on Compuware deal, Reuters via NYT, C3.
    The Compuware Corp. agreed yesterday to buy the Data Processing Resources Corp...for $24 a share, or about $350 million. It will also assume debt of $95 million....

  8. $343m leisure food services: Ogden says it will pay $127 million for Volume Services, Reuters via NYT, C3.
    ...and would assume about $215 million in debt....

  9. $130m trans Atlantic software: Microsoft in deal for Swedish company [Sendit AB], NYT, C3.

  10. $129m bathroom furnishings: U.S. Industries is buying Spring Ram for $129 million, Bloomberg via NYT, C3.

  11. $? convenience foods: Wal-Mart Stores Inc., NYT, C3.
    ...agreed to sell its McLane Foods the closely held Silver Brands Partners and Swander Pace Capital.

  12. $? convenience stores: Pantry Inc., NYT, C3.
    ...agreed to buy 28 stores from closely held Dilmar Oil Co....

  13. $? military supply mgmt: Raytheon sells Savi unit, Dow Jones via Bos Globe, E5.

  14. $? advertising: Thompson buys specialized agency [Dazai Advertising of San Jose], NYT, C8.

  15. $? accounting: Century Business Services Inc., NYT, C3.
    ...bought six business services companies...adding about $24 million in annual revenue.
6/24/99  11 takeovers in today's news - Business schools to MBA hopefuls, "Don't be a sucker & manage, just merge!" (Comments colleague Kate Jurow, "Ten years from now they're going to discover that they can't get an elephant to do what a cat can do.")
  1. $8b healthcare: Healtheon and its merger partner [WebMD] make Internet deals, Dow Jones via NY Times, C4 (NE).

  2. $4.4b utilities: [E. Mass.] utility merger fears raised - Boston Edison-ComEnergy deal expected to be approved today, by Peter Howe, Bos Globe, D5.
    Note also on 8/26/99: Utility merger finalized [- Parent companies of Boston Edison & Commonwealth Energy completed their merger into new company called NStar], by Peter Howe, Bos Globe, D9.

  3. $4.3b pubs: Whitbread PLC will buy 3,500 British pubs belonging to French-sounding (but British?) Allied Domecq PLC - Pub offer rejected, Bloomberg via NYT, C4.
    The world's second-largest liquor company, Allied Domecq...rejected a bid of $4.3b from Punch Taverns Ltd. for itse 3,500 British pubs, instead endorsing a lower [$3.8b] offer from Whitbread PLC...which could be worth as much as [$4.8b] once tax savings and long-term costs/benefits are added to the value of its shares....
    [Holymoly, European CEOs (one anyway, Sir Christopher Hogg, Allied's chairman) worrying about the long term! Amazing.]

  4. $3b wireless: Bellevue, WA-based Voicestream Wireless Corp. and Bethesda, MD-based Omnipoint Corp. announce $3 billion merger, by Edward Wyatt, NY Times, C8.
    Bloomberg via the Boston Globe has this at $4.5b: Voicestream will buy Omnipoint in $4.5b deal - Will create coast-to-coast cellular network, by Adam Steinhauer, Bloomberg News via Bos Globe, D2.
    [Hey, what's a measly $1.5 billion to CEOs today?] ...Following the merger, Voicestream will be the country's largest provider of wireless service using the technology known as GSM, for Global System for Mobile Communications... Voicestream...was spun off by Western Wireless only a month ago..\..
    Hutchinson Telecomms of (now-Communist) Hong Kong, already a major shareholder in Voicestream, has agreed to invest $957 million in the newly merged company....
    [Ah, dwei buchee, keshr (excuse us, but) wouldn't that be better reinvested in the needy economy of China, folks? Jeige bushr hen hau (this is not very good). Like, what the heck is the point of being communist if it doesn't make you reinvest more?!]
    In a further component of the deal, Cook Inlet Region, Inc., a native Alaskan corporation, is to invest in a joint venture to acquire certain licenses held by Omnipoint. Cook Inlet Region will own 50.1% (majority interest!) of the venture, and Voicestream will own the rest.
    [Way to go, Native Americans! All riiiight!]

  5. $1.6b Internet: White Plains-based Metromedia Fiber Network to buy San Jose-based Abovenet Communications for $1.55 billion, Reuters via NYT, C4.
    [Boy these mergers are really crisscrossing the country - WA-MD above, CA-NY here!...]

  6. $162m investment info: NYC-based Inc. to buy Lake Success, NY-based research company Market Guide Inc., Bloomberg via NYT, C4.
    [Well, Market Guide's HQ town has the right name, anyway.]

  7. $51m radio: Milwaukee-based Cumulus Media buys nine radio stations in the south, Bloomberg via NYT, C4.

  8. $2.7m biotech: LeukoSite buys biotech firm ProScript, by Ronald Rosenberg, Bos Globe, D6.
    ...The purchase comes nearly 4½ months after LeukoSite completed the $14.5 million cash purchase of CytoMed Inc., a struggling biotechnology company with two drugs in clinical trials. All three firms are based in Cambridge, Mass....
    ProScript, a seven-year-old company, has...downsized its operations from 42 people earlier this year to about 25....

  9. $?? chemicals: Germany-based SKW Trostberg AG to buy chemical businesses from Conn.-based Witco Corp., Bloomberg via NYT, C4.
    ...most of Witco's Oleochemicals and Derivatives Group....
    [This deal will be cancelled four days from now in a 6/29 article "Witco cancels offer to sell petroleum additives unit," Dow Jones via NYT, C4. The cancellation is offset by the reason Witco gives for it, "because of its pending $2 billion merger with the Crompton & Knowles Corp..." which we had not caught earlier this month prior to our switch to the NYT. "The newly formed Connecticut-based company will be called the C&K Witco Corp...."]

  10. $?? French bank talks, Dow Jones via NYT, C4.
    The Bank of France said the three banks involved in a protracted takeover battle have begun merger negotiations after nearly four months of deadlock. The chairmen from Société Générale SA, Paribas SA, and Banque Nationale de Paris SA met at the Bank of France headquarters in the presence of Jean-Claude Trichet, BofF governor....

  11. $?? Repsol SA gains control of YPF SA, Al Goodman via NYT, C4.
    Spain's largeste old and energy concern...said it had gained control of...Argentina's largest oil company.... The move vaults Repsol into the world's top 10 oil companies....
6/23  Twelve (12) more mergers, all from NY Times, Bus. sec. C:
  1. military/industrial: VA-based General Dynamics buys 3 CT-based GTE units for $1.1b, Reuters via NYT, C4 (NE).
    ...a month after reaching a $4.8 billion stock deal for the Gulfstream Aerospace Corp., an aircraft maker.
    The 3 gov't systems org units concentrate on communications systems, worldwide telecomm services and electronic systems, and employ 6,200 people.

  2. cellular: Alltel buys Liberty Cellular for $514m, Bloomberg News via NYT, C4.
    ...The combined company will have...more than 24,000 employees.

  3. acoustic electronics: Brit-based private equity firm Doughty Hanson buys IL-based family-owned Knowles Electronics for $530m, Reuters via NYT, C4.
    ...Knowles makes parts for hearing aids and acoustic components for voice recognition....

  4. office furnishings: Its own mgmt plus Warburg Pinkus Ventures buy Knoll Inc. for $496m, Bloomberg via NYT, C4. take the company private....
    [Good move! One more company freed from slavery to the speculators of Wall Street.]

  5. telecoms: Ottawa-based Newbridge Networks buys Sunnyvale-based Stanford Telecomms for $280m, Reuters via NYT, C4.
    [A Canadian company buys an American company for once. "Turnabout's fair play!"]

  6. reinsurance: Trenwick Group buys Chartwell Re for $229m, Dow Jones via NYT, C4. unite two relatively small reinsurance companies, both of Stamford, Conn....

  7. Internet: Santa Clara-based S3 Inc. buys San Jose-based Diamond Multimedia for $173.3m, Dow Jones via NYT, C4.

  8. Brazil banking: The largest bank not under gov't control, Bradesco, buys Baneb for $147m, by Simon Romero, NYT, C11.
    ...The sale is part of a Government push to transfer poorly capitalized state banks to the private sector.
    [Oh, now, there's a long-term solution for you!]

  9. snack food: Irish beverage firm Cantrell & Cochrane buys TLC Beatrice's Ireland-based Tayto unit for $116.5m, Dow Jones via NYT, C4.
    The transaction, expected to close this summer, will virtually complete the liquidation of TLC Beatrice, a company formed in 1987 through a $985 million buyout by Reginald F. Lewis, who died in 1993....

  10. auto industry: Mansfield, Ohio-based Shiloh Industries buys Cleveland-based MTD Automotive for $40m, NYT, C4.

  11. online auctions-trading: San Jose-based Ebay Inc buys German online trading firm AG for $undisclosed, NYT, C13.
    ...EBay...already owns a British auctioning website. Ebay operates the most widely used American Internet auction site.

  12. food&beverages: Sara Lee Corp. buys NJ-based privately held coffee aand beverage marketer Wechsler Coffee Corp. for $undisclosed, Dow Jones via NYT, C2.
    ...Sara Lee, the Chicago-based consumer packaged-goods giant, produces brands that include Hanes, Playtex and Hillshire Farms.
6/22  Eleven (11) takeovers noted in the NY Times today (only 3 picked up by the Boston Globe: #2,3,4) and most already listed in order of $$size! Guess we made the right decision. Just looking at the Globe for what's happening to our economy is like looking through rose-colored glasses.
Is it our imagination, or does all this takeover activity evince a profound boredom among our management classes? Once all this consolidation produces the inevitable (and highly interesting) implosion and depression (but remember to only call it a deep or prolonged "recession"!), the usual (and highly interesting) world war will likely follow. Per the Chinese curse - "May you live in interesting times."
  1. U.S. said to give Albertson's approval on $8.3 billion deal [to buy Salt Lake City-based American Stores], by Stephen Labaton, NYT, C2 (NE).
    Federal officials have agreed that they will not block [the] that Albertson has agreed to sell 144 stores in three states.... The divestiture....would be the largest ever ordered by the Federal Trade Commission in the retailing industry....
    The merger would create a company with more than 2,300 stores in 37 states and nearly 200,000 employees [but for how long?]....The deal is part of a wave of consolidation in the supermarket business. Four weeks ago, Kroger became the largest supermarket chain in the nation when it complete its acquisition of Fred Meyer Inc. In that deal, regulators ordered the sale of [only] eight stores....

  2. [Illinois-based] Abbott plans to buy Alza in stock swap - Drug makers' accord valued at $7.3 billion, by David Morrow, NYT, C1.
    ...One of the world's top sellers of antibiotics announced yesterday that it would acquire [a Palo Alto-based takeover target with excellent drug delivery programs and good technology].... Abbott has no trouble with licensing or acquisition agreements, having recently made more than 40. The company recently bought Medisense...for $876 million an d Novo Nordisk's plant-protection business....

  3. Weyerhauser agrees to buy MacMillan Bloedel for $2.45 billion, by Timothy Pritchard, NYT, C4.
    ...[The Tacoma-based] world's largest producer of softwood lumber and pulp..\..said today that it had agreed to of the biggest forestry companies in western solidify [its] position and strengthen its business in fiberboard and packaging....
    Weyerhauser has 35,000 employees in North America, with 5,900 of them in Canada. ["MacBloe"] based in Vancouver...employs 9,500 in Canada and the United States....
    Weyerhauser shares fell...$2.63 (3.8%) [but MacBloe] shares surged...$3.39 (23%)....
    [The mandatory financial analyst gave the usual blessing, saying the whole thing made lots of sense and was good for everybody. In this case however, he (Nick Majendie of Canaccord Capital in Vancouver) added a vital clue to the whole CEO boredom cycle:]
    "In the natural resource sector [or anywhere else for that matter], bigger tends to be better."
    ["So going through our management sector's little pea-brains in all this merging is, "Oh gee, now I'm BIGGER, I must be making progress!"]
    But he warned that British Columbia's [BC's] nationalistic New Democratic Party [NDP] government, which controls the province's forest resources, could fight the takeover of MacBloe, as it had done in the past.
    [Oh those nasty spoilsports! Never mind that nationalism is simply the term for "private property" on the international level - but then, CEOs tend to ignore their own principles unless directly in their own interest.]
    MacBloe was once one of Canada's strongest forestry companies. But like others with core operations in BC, it has been hurt in recent years by
    • low commodity prices
    • forest policies adopted by the province's NDP government [dig dig]
    • lumber import restrictions by the US
    • the economic crises of several Asian economies, which ordinarily are big buyers of North American wood products
    MacBloe underwent a huge restructuring in 1997, cutting its work force by 30% and selling certain fiberboard operations. It had been seeking a buyer for its packaging division, which led to the offer from Weyerhauser.
    [We don't suppose that 30% downsizing had anything at all to do with MacBloe's decline, say, in demotivating employees or anything? Naw, of course not. Sorry we mentioned it.]

  4. Royal Bank of Scotland [Citizens Financial unit] will purchase [United States Trust (UST) for $1.4b], Reuters via NYT, C4.
    ...The deal will result in the elimination of 800 jobs from the two banks and 30 branch closings. UST jumped...$6 a share [24%]....
    [There's the link between mergers and job loss and stock jumps. For further details, scan down to date 6/22 on our special Bank Mergers page.]

  5. U.S. clears purchase of Prudentia [Health Care by Aetna for $1b], NYT, C1 (NE), story pointer to main story on front page.
    ...over the objections of doctors' groups and consumer advocates [to] create the nation's biggest managed-care company....

  6. ADC Telecommunications to buy Irish software maker [Saville Systems PLC fot $700m], Bridge News via NYT, C4.
    ...A [Minnesota-based] supplier of voice, video and data systesms and software said yesterday that it had agreed to buy [a Galway-based maker of] billing systems and software for telecommunications markets....

  7. National Service Industries to buy Holophane [for c. $450m], Bridge News via NYT, C4.
    ...A diversified Atlanta-based manufacturer signed an agreement yesterday to acquire [a Columbus-based] industrial lighting maker [to] strengthen its lighting business..\.. Holophane's shares rose...$9.63 [34%, although] NSI's fell $1.13....

  8. Texas Instruments to purchase Israeli chip maker [Libit Signal Processing for $365m], Dow Jones via NYT, C4.
    ...TI, based in Dallas..\..agreed yesterday to acquire...a maker of chips and parts for cable TV and set-top expand its domination of the market for digital signal processor technologies into all segments of so-called broadband communications, which provide high-speed voice, video and data transmissions over traditional cable lines.... TI's shares rose....

  9. Austrian brick maker [Wienerberger Baustoffindustrie] is entering US market [by buying General Shale for $260m], Bloomberg via NYT, C4.
    ...The [Vienna-based] world's largest maker of bricks agreed yesterday to buy...the [Tennessee-based] US brick operations of Etex/Marley Group of Belgium...the second-largest US brick maker with 25 plants in eight states and about 12% of the market..\ enter the US building materials market, the world's largest....

  10. Transamerica selling mortgage servicing business [Transamerica Homefirst unit to Financial Freedom Senior Funding for $200m], Dow Jones via NYT, C4.
    ...A [San Francisco-based] financial services company..\..agreed yesterday to sell [a unit to an Irvine, Calif.-based] reverse-mortgage lender. In a reverse mortgage, a lender agrees to make monthly payments to a borrower, with the borrower's home equity serving as collateral for the loan. The equity is used to repay the loan when the borrower sells the home, moves out or dies. The ultimate source of repayment is the homeowner's estate. The [sale] includes Transamerica Homefirst's...reverse-mortgage loan portfolio.

  11. International Integration buys Conduit [Communications for c. $58.5m], Bloomberg via NYT, C4.
    ...[A designer and upgrader of] computer systems...nicknamed I-Cube..\..said yesterday that it had acquired [a closely held, London-based provider of] information-technology consulting. I-Cube's shares rose $2.06....
6/18 News Corp. will buy 2 publishers from Hearst [for est. $200m], Bloomberg via Bos Globe, C3.
NEW YORK - ...The company headed by Rupert Murdoch agreed to buy William Morrow & Co. and Avon Books from closely held Hearst Corp., adding the businesses to News Corp.'s HarperCollins Publishers unit....
[This bodes ill. Usually closely held companies, like family firms, are kinder to employees. But note that employees, in our current deepening mire of labor surplus and skill shortage, are constantly looking for kindness, when they should be looking to control their own supply by reversing their over-availability to the job market that's been caused by onrushing technology while the workweek stands still - at its 1940 level. U.S. senators led by Hugo Black were passing 30-hour workweeks SIXTY-SIX years ago, and prophets like Arthur Dahlberg and Howard Scott were prescribing 20-hour, even 16-hour workweeks the year (1932) before that! And what have we got at the dawn of the Third Millennium? An antique 40-hour standard which those who still have "full-time" jobs have not seen the "north end" of for 5-10 years because they've been working 50, 60, 70 hour weeks for fear of "restructuring" and "cost cutting." And if they're on salary and not wages, they're working all that overtime for free - charity for the rich - and worsening their own over-supply and leverage into the bargain. Oh sure, what a "robust" economy - with absolutely NO FUTURE along these lines.
[The alternative? Change! - from fixed workweeks to fluid workweeks, like Nucor and Lincoln Electric.]

["The British are coming! The British are coming!"]
6/17 $3.2b [New England] Electric purchase approved - Britain's National Grid gets commission OK, by Peter Howe, Bos Globe, D6.
The...takeover of [an American] electric system by [a] British power giant...won a key approval yesterday from the Federal Energy Regulatory Commission.
[Boy, is this offering your jugular to a foreign power! - and we say that as native Anglo-Canadians who worship the ground Brits walk on. Let us say it more bluntly. This is a damn stupid thing for America to do! And a silly thing for the Brits to want in the first place. Why the hey do they think it's called the NATIONAL Grid?! And it doesn't stop there...]
The commission's move, along with its approval of ScottishPower's acquisition of an Oregon-based utility, marks its first approval of foreign ownership of US utilities. It imposed no conditions or restrictions on the NEES.
[Lord, how many high-risk experiments does America want to run simultaneously? Jones' Law - "If anything can go wrong, it will." And if this trend continues, the imagination boggles at the things that could go wrong! Novelists, this way to the feeding frenzy for scary plot possibilities! Haven't we already had the outcry when a slick Canadian corporation (feels so good to say "slick Canadian" anything!) zoomed in on a bunch of virtual mining subsidies out in the western states within the last year or two, subsidies tacitly intended only for the parasitic US mining industry? On the other hand, now that the US is far and away the most dangerous nation in the world, maybe it's not such a bad idea that the calm and reserved Brits (except plane-wrecking soccer fans from Manchester) gain the ability to pull the plug on us if we start something particularly stupid. (Notice how us Canucks quietly switch sides, depending on who's getting the best of the argument at the moment. Hey, there's gotta SOME bennies in being forever peripheral!]
The NEES-National Grid deal still faces what are expected to be uncontested approvals by the Securities and Exchange Commission, the Nuclear Regulatory Commission (oh geez, we didn't even think of THAT aspect!), and state regulators in New Hampshire and elsewhere [but not Massachusetts for some reason].
[Well, Americans in power [pun] have gotten so dumb that they'll probably OK this ridiculosity and hand over their big basement circuit breakers to the boys in shakos and kilts. "Lord, lord, what mad days we spend!"]
Cheryl A. LaFleur, senior vice president and general counsel to the Westborough-based holding company [aha, we KNEW nos copains, les French Canadiens, had to have a finger/tentacle in this somewhere!] said officials there remain optimistic the combination will be...largely invisible to consumers....
[See, SEE, the Brits are learning from us Canucksters the intense joys and values of infiltrational invisibility!]
NEES operating companies include: Mass. Electric, with 970,000 customers in 146 cities and towns; Nantucket Electric...with 10,000; Narragansett Electric...with 330,000 in 27 Rhode Island communities; and Granite State Electric...with 36,000 in 21 communities....
[We see it now! - the mighty United Kingdom of Great Britain and Northern Aarlan' invisibly takes over Nantucket (a scurvy crew of rebellious would-be secessionists anyway!), Rhode Island, "live free or die" New Hampshirians aching to be reunited with Old Hampshire, and then, the beantown hub of New England itself - all based on inconspicuous control of electric power for computers, refrigerators, stoplights, everything! Then "Olde" England, which has always resented that insult, gets to absorb New England back into itself and take over its offspring's proud name for the whole transAtlantic "national" grid. The slur "Old England" goes back where it belongs, to the district of Anglen in the German state of Holstein just south of Jutland. (See Palgrave's History of the Anglo Saxons, p.27.)]

6/17 Denver firm [New Era of Networks] purchases Microscript of Danvers [Mass. for $34m], Bloomberg via Bos Globe, D9.
[Speaking of names, "New Era of Networks" is not the catchiest one we've ever heard.]
...The number one maker of software that links incompatible computer programs..\..agreed to buy...a maker of [tools] to allow varied programs made for Microsoft Windows NT to work together.... Microscript...serves 25% of the country's critical-case hospitals [and] has 62 employees in Danvers and London.
[See, the Brits are taking over our networks and critical care hospitals too! It's a quiet invasion, we tell you, an invasion! Bear in mind that as recently as the 1920s, Canada had an actual invasion plan ready and waiting to invade the US. Yessiree, Col. J. Sutherland Brown (nicknamed "Buster Brown" - we are not making this up!) and two other officers of the Canadian Military Operations and Intelligence actually crossed the St. Lawrence in a motorcar at Ogdensburg in 1922 to perform a recon of possible invasion routes into upstate New York. He concluded that "the country everywhere is passable by infantry." If war with the US seemed likely, Canada's Defence Scheme Number One would launch pre-emptive attacks all along the world's longest undefended border and at least provide the two-week delay necessary for reinforcements to arrive from the Mother Country and elsewhere in the Empire, a sort of Canadian Schliefenplan. This at a time when the Motherland would have sacrificed Canada in an instant for their friendship with the US. But hey, this very plan worked in 1812! See Dyer & Viljoen's The Defence of Canada, Chap. 14.]

6/16 Utility mergers continue - Moves by Central Maine, Northeast Utilities raise questions on [Boston Edison's] future, by Peter Howe, Bos Globe, D1.
The consolidation of New England's power industry accelerated yesterday, with announcements that...

The moves fuel what has been a frenzied rush among utilities to combine into ever-larger units as state-level deregulation pushes them to sell power plants and grow into larger distribution companies....
[Shades of the periodic "frenzied rush" of lemmings - over the cliffs to their doom? Don't you just love how these CEOs whine and whine for deregulation, then when it comes and they start following a really weird, risky and extreme fad, they turn around and say "deregulation pushed them"?! Pathetic.
[Strange how such powerful and otherwise intelligent human beings are so prone to such simplistic ideas, the operative one here seeming to be "Big is beautiful." Surely we need the corrective voice of E. F. Schumacher and his 1976 classic "Small Is Beautiful" to get back to the real truth, "Diverse is beautiful." And we mean "beautiful" in its core functional sense of reproductive and highly survivable. Diversity is the raw material of the critical variable in the very long-term survival of large living systems. And that critical variable is, more than all others, the one value that Timesizing and its series of upgrades maximize.]

6/16 Allaire buys Live Software for $24.2m, Bloomberg via Bos Globe, D9.
...A [Cambridge, Mass.-based] developer of software for the Web agreed to buy [the Calif.-based] closely held [creator of] JRun, a program that allows businesses to build Web-based Java applications to provide businesses with access to the latest Java software functions. Live Software has 10 employees. [Its] operations will be moved to Cambridge.
[How much input did those 10 employees have into that decision, and how many of them will be moving to Cambridge with what moving subsidies, if any? In short, how many jobs will this takeover cost?]

6/16 There, folks, you have the sum total of takeovers the Boston Globe Business Section published today - as far as we could find. Three takeovers and no relocations. We've been wondering how the New York Times Business Section compared. Twelve takeovers and one massive relocation (4000 jobs). Two questions -

  1. How the hay did the Globe Business section win that award a few months back?
  2. Is the Times syndicate, which owns the Globe, trying to protect the intellectuals around the Boston hub (Harvard, MIT and 46 other colleges in the 8th Congressional District alone) - to cushion them from the scary stuff that's going on in this "boom" economy?
The Times missed one merger that the Globe picked up among its three, the biggest (Energy East and Central Maine Power for $1.2b, and they said the value of the NE Utilities-Yankee merger was only $478m, not the Globe's $679m) so altogether there were 13 takeovers reported by these two papers today. Here are the other ten reported only by the New York Times.
  1. 6/16 [NJ-based] Pharmacia & Upjohn is in $650 million deal, Bloomberg via NY Times, C3. buy the [San Francisco-based] biotechnology company Sugen Inc....

  2. 6/16 Bowthorpe of Britain in $463.6 million deal for [Calif.-based] Netcom [Systems], Reuters via NT Times, C3.
    The British electronics group [which] focuses on wide area network, transfer mode and wireless technologies, making products like wheelchair power packs and "black box" flight recorders..\..said yesterday that it had agreed to buy...a leading supplier of communications testing equipment [which] focuses on Internet protocol and local area network [LAN] technologies.... The privately owned Netcom employs about 230 people....

  3. 6/16 Suez Lyonnaise [des Eaux S.A. for $421m] buying Calgon, Reuters via NY Times, C3.
    The French conglomerate...said its Degremont unit had agreed to acquire the American water conditioning company...from Imetal S.A., also of France.... Suez Lyonnaise joins its French rival Vivendi in expanding in the American market.

  4. 6/16 Tower Automotive to buy Active Tool for $317.5 million, Bloomberg via NT Times, C3.
    ...A [Grand Rapids-based] leading maker of automobile panels and frames said yesterday that it had agreed to buy...a frame-parts broaden its product line.... The closely held Active Tool and an affiliate, the Active Products Co., [also] have offices and factories in Michigan....

  5. 6/16 Terex agrees to acquire Powerscreen for $294 million, Dow Jones via NY Times, C3.
    ...[A Conn.-based maker of] a range of construction and mining equipment..\..said yesterday that it had agreed to acquire [Northern Ireland-based] Powerscreen International PLC [which] makes screens and crushers used to process quarried rock, to diversity its product lines....

  6. 6/16 [Consorcio G] Grupo Dina plans to sell 61% stake in motor coach unit [to New York-based] Joseph Littlejohn & Levy for $125m], Dow Jones via NY Times, C3.
    ...A Mexican bus and truck maker said yesterday that it would sell a [majority] stake in its motor coach an investment group...which specializes in corporate revampings..\ it seeks to lighten its debt load....

  7. 6/16 Cadence Design and Orcad agree to a $121 million deal, Bloomberg via NYT, C3.
    ...A [San Jose-based] maker of software used to design computer chips said yesterday that it had agreed to acquire [an Oregon-based] supplier of software and services to electronics companies....

  8. 6/16 Unisys to purchase a communications software maker [Calif.-based Pulsepoint Communications for about $100m], Bloomberg via NYT, C3. broaden its array of computer management services for corporations....

  9. 6/16 Boise Cascade in deal to extend its distribution outlets [by buying Furman Lumber for $?], Bloomberg via NYT, C3.

  10. 6/16/99 Medpartners Inc. [of] Alabama agreed to sell Mullikin Medical Group and Southern Medical Corp. to KPC Global Care Inc. [of] Calif. for $?, New York Times, p. C3.

What a tragedy of undiversification is here! Never mind the loss of competition and competitiveness, think of the loss of diversity and its children, creativity and survivability!

For earlier Mergers&Acquisitions, click on the desired date -

  • Jun.1-15/99
  • Apr-May/99
  • Mar/99
  • Feb/99 and before

    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 * online.

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