Wednesday, January 23, 2008

Alcatel-Lucent Post Merger Performance

Information accesses on 24 Jan 2008 from

Incorporated in:

Executive Offices:
54 rue la Boétie
Paris 75008, France

Chief Executive Officer:
Patricia Russo

79,000* in 130 countries

Stock Listing:
Euronext Paris and NYSE - ALU

€18.3 billion* (CY06)

* after completion of the Thales transaction

Alcatel-Lucent's vision is to enrich people’s lives by transforming the way the world communicates. Born with an unparalleled ability to offer end-to-end communications solutions to our customers, we are focused on enhancing client relationships and enriching the lives of people through communications. Expert, driven, intuitive, innovative, Alcatel-Lucent is the first truly global communications solutions provider, with the most complete end-to-end portfolio of solutions and services in the industry.

About Alcatel-Lucent
Alcatel-Lucent’s vision is to enrich people’s lives by transforming the way the world communicates. Alcatel-Lucent provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end-users. As a leader in fixed, mobile and converged broadband access, carrier and enterprise IP technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable compelling communications services for people at home, at work and on the move.

With 79,000 employees (after the completion of the Thales transaction) and operations in more than 130 countries, Alcatel-Lucent is a local partner with global reach. The company has the most experienced global services team in the industry, and Bell Labs, one of the largest research, technology and innovation organizations focused on communications. Alcatel-Lucent achieved adjusted proforma revenues of Euro 18.3 billion* in 2006, and is incorporated in France, with executive offices located in Paris.

With a strong focus on complete solutions maximizing value for customers, Alcatel-Lucent is organized around three business groups and two geographic regions. The Carrier Business Group serves fixed, wireless and convergent service providers - as well as enterprises and governments for their business critical communications. The Enterprise Business Group focuses on meeting the needs of business customers. The Services Business Group designs, deploys, manages and maintains networks worldwide. The company's geographic regions are the Americas and Asia-Pacific, Europe, Middle East, and Africa.

Innovation & Technology
Alcatel-Lucent today is one of the largest innovation powerhouses in the communications industry, representing a combined R&D investment of Euro 2.7 billion in 2005, and a portfolio of over 25,000 active patents spanning virtually every technology area. At the core of this innovation is Alcatel-Lucent’s Bell Labs, which brings together Lucent Technologies' Bell Labs and Alcatel’s Research & Innovation organizations, providing Alcatel-Lucent with an innovation engine comprising researchers and scientists at the forefront of research into areas such as multimedia and convergent services and applications, new service delivery architectures and platforms, wireless and wireline, broadband access, packet and optical networking and transport, network security, enterprise networking and communication services and fundamental research in areas such as nanotechnology, algorithmic, and computer sciences.

Formed from the merger of Alcatel and Lucent Technologies, Alcatel-Lucent combines two entities that share a common lineage that can be traced back to 1986, when Alcatel’s parent company, CGE (la Compagnie Générale d’Electricité), acquired ITT’s European telecom business. Nearly 60 years earlier, ITT had purchased most of AT&T’s manufacturing operations outside the United States. AT&T was Lucent’s former parent company.

By creating Alcatel-Lucent we are bringing our common lineages back together and starting an exciting new chapter of our history -- creating the world’s first truly global communications solutions provider, with the most complete end-to-end portfolio of solutions and services in the industry.


September 2007

Restructuring Plan

Pat Russo, chief executive of Alcatel-Lucent, has been given one month to present an emergency restructuring plan to her board, as well as lay out where the group should focus its future research and sales efforts.

Ms Russo is also being urged to streamline the telecommunications equipment group’s organisational structure, particularly the executive committee, which has grown top heavy since the merger of equals between Alcatel of France and Lucent of the US
Directors believe this has slowed decision-making and helped spark the crisis that has led to three profit warnings in less than 10 months.

The group’s directors met in Paris on Friday for an update on the crisis, where they told Ms Russo to present the information at the next board meeting on October 30. Directors are intersted to know the next step, after the restructuring is done.

Alcatel-Lucent has been struggling with a rapidly deteriorating market in the US, as well as the typical integration problems that beset many mergers. However, some inside the company say management has not been quick enough to make the necessary hard decisions, including a far more radical approach to cost-cutting and the elimination of management and operational duplications.

Per Lindberg, analyst at Dresdner Kleinwort, on Thursday published a research note calling on Alcatel-Lucent to replace Ms Russo with Mike Quigley, former chief operating officer and one-time heir apparent to Mr Tchuruk, who quit last month.

Mr Lindberg, who changed his rating on Alcatel-Lucent from “hold” to “buy”, said the company should consider disposals so as to pay for a more ambitious reduction in its workforce.

Alcatel-Lucent is planning to reduce the workforce by 12,500, but Mr Lindberg said it should be cut by 30,000, so as to bring productivity in line with rivals such as Ericsson.

He added that Alcatel-Lucent should refocus its research and marketing on areas where the company had competitive strength.

“There is little doubt that the merger between Alcatel and Lucent has turned into a veritable fiasco,” said Mr Lindberg.

Patricia Russo was beaming on Dec. 1, 2006, when she appeared at a Paris press conference celebrating her appointment as chief executive officer of Alcatel-Lucent, a $26 billion global telecom equipment giant newly created by an historic Franco-American merger. She has had little reason to smile since then. Alcatel-Lucent (ALU) has posted three consecutive quarterly losses.

On Oct. 31, 2007 the company announced an emergency restructuring plan under which one in five of its 80,000 employees will lose his job by 2009. Shares are down a stomach-churning 50% since January, and five of Russo's top deputies have left the company. Many industry-watchers now say the merger was a mistake.

Russo agrees it has been an awful year for Alcatel-Lucent. But she staunchly defends the merger and cites evidence the worst is now over. Alcatel-Lucent's recent turmoil stems not from bad strategy but from "problems that we're going to work our way out of."

One of those problems, Russo now admits, was that integrating Alcatel and Lucent proved more disruptive than expected. Customers, uncertain about possible changes in the merged company's product lineup, hesitated to place new orders. At the same time many employees were "distracted" by worries their jobs would change or be eliminated, she says.

That opened the door to aggressive competitors such as mobile equipment market leader Ericsson (ERIC) and Huawei Technologies, who have grabbed market share from Alcatel-Lucent's wireless network business. "Our competitors pulled the rug out from under us," Russo says. "They put forward some very aggressive pricing." Some mobile operators jumped ship, and while Alcatel-Lucent was able to hold onto others, it often had to give discounts or concessions that ate up profits.

Profitability also suffered as Alcatel-Lucent tried to streamline its product lineup. Take W-CDMA, the third-generation wireless technology the company adopted as a successor to the so-called CDMA technology central to its U.S. wireless business. Russo says she decided to discontinue much of the W-CDMA gear developed by Alcatel, replacing it with equipment made by a unit of Nortel (NT), which the merged company acquired earlier this year. When customers began changing over to new equipment, Alcatel-Lucent had to absorb much of the cost.

Russo acknowledges too that until a few months ago, some of Alcatel-Lucent's product offerings weren't up to par technologically. "We were late in getting to the refresh of the latest technology" for GSM networks—the second-generation mobile standard used in most countries outside the U.S. The GSM offering was updated several months ago, she says, and now "That business is doing just fine."

Indeed, Russo says many of the problems bedeviling Alcatel-Lucent over the past year are starting to ease. Customers now have clearer information about the merged company's product portfolio. And rivals such as Ericsson can't afford to keep luring customers away with aggressive pricing, as their own profits have tumbled .

According to Russo,Alcatel-Lucent also is powering ahead in developing countries Just this week it won a $1.1 billion contract with two Chinese mobile operators for network equipment. Its fixed-telephone and broadband equipment business, though suffering from the housing slump in the U.S., is generally healthy too. The company remains the world leader in digital subscriber line (DSL) broadband equipment and hopes to translate its big customer footprint and strong carrier relationships into a post position for the coming rollout of optical networks to neighborhoods and homes.

With an eye to falling prices and tightening margins for basic telecom equipment, Russo also is pushing Alcatel-Lucent increasingly into the service and support business, where it already ranks No. 2 globally—behind Ericsson. A team of 20,000 field technicians operating in 130 countries has won Alcatel-Lucent contracts to build and operate fixed and mobile networks for carriers around the world, and services should account for about one-quarter of the company's top line this year, up from 20% in 2006. The services market worldwide is growing at double the rate of telecom equipment.

Russo is confident the company will emerge stronger and more competitive. "This merger still has strategic logic," she says.

Is the Worst Over at Alcatel-Lucent?
Business Week, Europe November 28, 2007,


Thursday, January 3, 2008

M & A Advisors

Allegiance Capital:

Allegiance Capital Corporation is a full-service investment banking firm specializing in the middle market (companies with revenue from $20 million to $500 million), with offices in Dallas, New York, Minneapolis/St. Paul, Vancouver, British Columbia, Shanghai and Tel Aviv. Through its worldwide network, Allegiance Capital assists companies in every aspect of selling and financing a business, including debt restructuring, mezzanine financing, buy out management, strategic partnering, consulting and other related services. Allegiance Capital differentiates itself by having deep industry knowledge, vast contacts with potential buyers, heavy investment in educating sellers and obtaining premium pricing for clients. For more information, refer to the company website at

Allegiance Capital Corporation
David Lonsdale, 214-217-7723
President/Managing Director

Mergers and Acquisitions Advisor Awards for 2006

6th Annual Middle-Market M&A Awards Winners

Announced December 11, 2007

Industry/Sector Deals of the Year

Business to Business Services Deal of the Year
Sale of Corillian, Financial Technology Partners

Consumer Services Deal of the Year
Sale of Ria Envia Inc., Manatt, Phelps & Phillips, LLP

Energy Deal of the Year
Acquisition of Markwest Hydrocarbon Inc., Akin Gump Strauss Hauer & Feld

Professional Services Deal of the Year
Acquisition of Honeywell/Dimensions International, Inc., BB&T Capital Markets

Media, Entertainment and Telecom Deal of the Year
Sale of Picture Production Co., Houlihan Lokey Howard & Zukin

Consumer Product Deal of the Year
Sale of Dimensions Holdings Inc., Edgeview Partners

Life Sciences Deal of the Year
Sale of Valeant Pharmaceutical selected assets, FTI Consulting

Retailing Deal of the Year
Tie -
Sale of Stride Rite, Financo, Inc.
Sale of Collective International LP, Financo, Inc.

Computer and Information Technology Deal of the Year, Below $100M
Sale of Xcitek, Marlin & Assoc., LLC.

Computer and Information Technology Deal of the Year, Above $100M
Sale of Latent Zero, Financial Technology Partner

6th Annual Middle-Market
M&A Awards Winners

Financial Services Deal of the Year, Below $100M
Sale of Xcitek, Inc., Marlin & Assoc., LLC

Financial Services Deal of the Year, Above $100M
Sale of Corillian, Financial Technology Partners
Manufacturing Deal of the Year - Consumer Product, Below $100M
Sale of American Furniture Manufacturing Inc., Edgeview Partners

Manufacturing Deal of the Year - Consumer Product, Above $100M
Sale of Wilton Industries, Inc., Robert W. Baird & Co.

Manufacturing Deal of the Year-Industrial, Below $100M
Sale of Aeroglide Corp., Edgeview Partners

Manufacturing Deal of the Year-Industrial, Above $100M
LKQ acquisition of Keystone Automotive Industries, Robert W. Baird & Co.

Firms and Product of the Year

Investment Banking Firm
Marlin & Assoc.

Law Firm of the Year
Akin Gump Strauss Hauer & Feld, LLP

Private Equity Firm of the Year
Sun Capital Partners, Inc.

Due Diligence/Valuation Firm of the Year
Crowe Chizek and Company, LLC

Product of the Year
M&A Acquisition Tool, LexisNexis

Major Awards:

International/Cross Border Deal of the Year, Below $100M
Sale of Hugin ASA, Marlin & Assoc. LLC

International/Cross Border Deal of the Year, Above $100M
Sale of Ria Envia Inc., Manatt, Phelps & Phillips, LLP

Strategic Acquisition of the Year
Sale of Stride Rite, Financo, Inc.
Sale of Collective International LP, Financo, Inc

Deal of the Year
Sale of Ria Envia Inc., Manatt, Phelps & Phillips, LLP

Dealmaker of the Year
Steven McLaughlin, Managing Partner, Financial Technology Partners

2007 Lifetime Achievement Award
David T. Morgenthaler

Wednesday, January 2, 2008


The case needs to be developed. Presently relevant materials are being assembled
3rd Jan 2008

THE 71 billion takeover of Dutch bank ABN Amro was a coup. Sir Fred Goodwin, the 49-year-old chief executive of Royal Bank of Scotland (RBS) has been confirmed as the uber-hero of Scottish business and finance. The three-way takeover, in which RBS acquired the Dutch lender's European corporate and investment banking arms as well as its Asian operations, with other parts going to RBS's bidding partners Banco Santander and Fortis, is the largest and most complex banking takeover ever. At a stroke it has transformed RBS into a much more global financial services player, enabling it to narrow the gap with giants such as Citigroup and HSBC.

The most challenging task facing Goodwin and his close colleague Mark Fisher (RBS's director of manufacturing) is to deliver on promises they made to investors during the gruelling takeover battle, which lasted from April to October. This will include dividing up the spoils between the three winning banks without upsetting customers or staff as well as integrating the businesses that RBS has acquired with the Edinburgh-based bank's existing operations - again without alienating ABN Amro's customers or staff.

Given that Goodwin has promised cost savings of 1.3bn a year from the parts of ABN Amro that he is acquiring, job losses are clearly on his agenda. There could be as many as 20,000, and he has said they will not uniquely fall on the previously underperforming Dutch side of the equation.

On December 6, 2007, Goodwin - said: "One of the most important things we've been doing is looking at management structures. One of the things we did after NatWest, and it slows things down a little bit but it's critically important, in making all the management appointments, is to go through an interview process and we involve external consultants in the process, to ensure fairness and also to ensure an appearance of fairness. Once the senior appointments have been made, it removes a lot of uncertainty."

RBS's shares were trading at 705p on February 16, 2007 before Goodwin announced his intention to bid for the Amsterdam-based bank. They have since fallen 39% to 432p.

Admittedly, all bank shares have taken a hammering over worries about exposure to bad debts arising from the sub-prime mortgage crisis. Investors have been fretting about the true level of that exposure, enmeshed as it is in opaque and convoluted financial instruments such as collateralised debt obligations (CDOs), which are basically parcels of debt extended to sub-prime borrowers in the US.

After the $10.5bn acquisition of Ohio-based Charter One Financial in May 2004, Goodwin came in for a similar drubbing from investors, dismayed that he had overpaid for the US bank. Goodwin was forced to promise to steer clear of further big acquisitions and pledged to do more to boost shareholder value, through organic growth, higher dividends and share buybacks. For a couple of years, he kept to his pledges, but when the opportunity to acquire ABN Amro arose last spring, he could not resist having a go.

Writing in the Financial Times in October, Lina Saigol claimed that Goodwin and his Dos Amigos - Emilio Botin, patriarch of Madrid-based Banco Santander and Jean-Paul Votron, boss of Belgian-Dutch bank Fortis - were "driven by ego, conceit and a deep-seated need for power" to plough ahead with the ABN Amro deal even as global capital markets were collapsing. She argued they were paying a 70% premium to ABN Amro's share price prior to the announcement of its abortive tie-up with Barclays. Many critics argue the three bidding banks would have been better advised to walk away or at least lower their offer for ABN Amro. They say they could have invoked a so-called "material adverse change" clause, arguing that the sub-prime crisis - which had yet to erupt when they made their offer in April - had changed the value of ABN Amro for good.

James Eden, bank analyst at Exane BNP Paribas, says: "We did not condone the decision by RBS management to press ahead with the value destructive acquisition of ABN Amro. In our view, it could - and should - have walked away, or at least secured a lower acquisition price."

In October and December he was keen to stress the value that he believes lurks within ABN Amro's international franchise. He also said it had only about £300 million of markdowns on its sub-prime related investments.

Speaking on December 6, Goodwin argued that RBS's prime motivation for the ABN Amro deal was to diversify its asset base and give the Edinburgh bank a wider range of strategic options. "What we've been trying to do for a long time now is build a group that has sufficient diversification in its income streams that we've opportunity to participate in growth whenever and wherever it happens No single economy is ever going to be booming all the time but having a finger in a greater number of pies gives us a greater opportunity to deliver sustainable good quality earnings."

On that occasion Goodwin also took the opportunity to reassure investors that RBS's annual results for 2007 (due in February) will be ahead of analysts' estimates - in other words more than £10 billion - and that the merged bank's exposure to the whole sub-prime mess would be much lower than had been feared. Overall, he said the bank will write-off about £1.5bn because of its exposure to the toxic tide and that large areas of RBS are performing strongly.

After biting his tongue for several weeks while the brickbats fell all around, Goodwin clearly relished being able to deliver a much more positive story than many in Square Mile had expected on December 6. He said: "It hasn't exactly been beer and skittles this year but we're anticipating a strong set of results. I think you'll see in the body of the pre-close trading statement a comment suggesting that when you strip out the markdowns and the gains, you'll see a growth trajectory that's pretty consistent."

Goodwin is also surprisingly upbeat about the outlook for the UK economy - which some believe will follow the US into recession. "It is not in bad shape," he says. "Slowing down never feels as good as speeding up or being at a constant speed. From our customers' perspective it doesn't look too bad. Obviously the retailers are all looking to see anxiously what happened over the Christmas period but touch wood so far so good. We're seeing some very high levels of credit-card spend."

Nor does Goodwin believe the crisis at Northern Rock will affect consumer confidence or cause people to leave their credit cards at home. He says: "Insofar as there's any damage from Northern Rock, I think it's more to do with international perceptions of the UK financial services industry. I don't think it will affect the behaviour of the consumers in the UK because no consumers have lost any money as a result of Northern Rock."

He also points out that RBS has been a major beneficiary of the Newcastle-based lender's collapse, with many depositors shifting savings to RBS and NatWest as part of a "flight to quality". Overall, he says, RBS saw inflows of more than £1bn during September (the month in which Northern Rock collapsed).

Goodwin was rumoured to have been approached to take over from Charles "Chuck" Prince as chief executive of Citigroup. Even though such a move would see him multiply his remuneration package tenfold, Goodwin is seen as unlikely to want to take over the reins at the New York-based banking giant. He recognises that his job at RBS is far from complete. As long as he can apply the same ruthless determination to integrating ABN Amro as he applied to the integration of NatWest, he will almost certainly be able to prove his critics wrong.

Excerpts from the article from Sunday Herald, 3 Jan 2008

Tuesday, January 1, 2008

Analysis of M&A Deals in 2007

Article in McKinsey Quarterly Winter 2008 Issue

Global deal making n 2007: is the boom in M&As over?
Antonio Capaldo, Richard Dobbs, and Hannu Suonio

Announced mergers reached $4.4 trillion globally in the first 11 months of 2007.

Merger activity plunged about 40% from the second to the third quater.

The slowdown was concentrated mainly in PE sector. Corporate M&A lost none of its vigour.

The PE volume fell by 50%. Before the credit crunch in August 2007, PE activity reached unprecedented levels, four times higher than it had been during the previous peak, in 2000. It represented more than 20% of M&A activity in the current boom.

Cross border activity now represents 40% of globla M&A up from 20% in 2000 and 30% in 2005.

Companies in emerging markets are active in cross border deals as buyers and sellers. Asia and West Asia now account for 15% of the global volumes. The volume increases in 2007 over 2006 in India, China and West Asia are 110%, 47% and 38% respectively.

The major global deals in Asia are Tata-Corus and Vodafone-Hutchinson Essar.

Mega deals defined as deals with a value of more than $10 billion contributed 30% of 2007 volume. That is above 10-year average of 20%. The number of deals was 45 in 2007 versus 54 in 2006.

Hostile takeovers generated 12% of global volume. This considerably higher than the 10-year average of 3%.

The year's average deal value added (DVA)-our measure of total value created for buyer and seller-reached 6.5%, well above the levels of previous two years.

The interesting finding is that acquirers' DVA has gone up from an average of -7.0% (1997-2004) to around 0.5% during the past three years. By contrast, the DVA for the shareholders of target companies, has remained largely stable, at 10%, throughout the past decade.

The standard deviation of DVAs reached 32%, significantly higher than it has been in all recent years except the 2000 peak.

The shares of bad deals (deals having DVA fo less than -15%0 reached a surprising 17% of total deals in 2007. This is three times more than the level in 2006 and it is around the level in late 1990s which was characterized by a significant overall destruction of value from bad M&A.

Average premiums paid decreased to 18% from 19% in 2006.
Mint published one more article on 3 Jan 2008 on deals in 2007 pages 19,20

Deals totalled $4.5 trillion, 24% increase from 2006. (Thompson Financial)
Number of deals totalled 42,364 in 2007 versus 38,602 in 2006.

Each quarter more than 10,000 deals were announced.
Deals peaked in second quarter 11,082
last quarter 10,027

Eupore deals $1.8 trillion more than $1.7 trillion of USA.

Frank Yeary head of globla M&A for Citigroup
H. Boon Sim Head of Americas M&A group at Credit suisse
Doug Braunstein Head of IB americas for J P Morgan
Pero Novelli, Head of globla M&A, UBS AG

Sovereign wealth funds invested $60 billion

Biggest LBO $32.1 billion by KKR led consortium of TXU corp.

Also bid of $35.3 billion for BCE by an investor group that includes Providence Equity Partners

BHP Billioton's $145 billion offer for rival Rio Tinto

Top Advisors

Goldman Sachs
Morgan Stanley
J P Morgan
Credit Suisse Group

Top Legal Advisors

London's Allen and Overry LLP
Sullivan & Cromwell LLP of NY
Freshfields Bruckhaus Deringer LLP of london
Skadden, Arps, Slate, Meagher & flom LLP of NY
Linlaters LLP of london
Clifford Chance LLP london

*Deallogic reported $4.7 billion for 2007

Top M&A Deals of 2007

Rank --- Partners *** Date ====== Value, US$m
1 AstraZeneca - MedImmune *** Apr '07===== $15,600
2 Schering-Plough - Organon*** Mar '07 $14,500
3 Siemens - Dade-Behring*** Jul '07 $7,000
4 Merck Serono - Mylan*** May '07 $6,700
5 Hologic - Cytyc*** May '07 $6,200
6 Nestle - Gerber Products*** Apr '07 $5,500
7 Warburg P. - Bausch & Lomb*** May '07 $4,500
8 Mitsubishi - Tanabe*** Feb '07 $4,300
9 Eisai - MGI Pharma*** Dec '07 £3,900
10 Blackstone - Cardinal Hea.*** Jan '07 $3,300
11 Roche - Ventana ***Jun '07 $3,000
12 Celgene - Pharmion*** Nov '07 $2,900
13 Shire - New River*** Feb '07 $2,600
14 Nestle - Novartis*** Jul '07 $2,500
15 Reckitt - Adam Resp.*** Dec '07 £2,300
16 Inverness Med In - Biosite ***May '07 $1,700
17 GSK - Reliant ***Nov '07 $1,650
18 Qiagen - Digene ***Jun '07 $1,600
19 EQT - Dako Feb ***'07 $1,300
20 Axcan - TPG Capital ***Nov '07 $1,300

Source: CurrentPartnering, 2007

M&A scorecard in detail
1. AstraZeneca - MedImmune

Acquisition - Headline value: $15,600m
Apr '07

AstraZeneca has entered into a definitive agreement to acquire MedImmune, in an all-cash transaction.

Under the terms of the agreement, which has unanimous MedImmune Board support, AstraZeneca will acquire all of the fully diluted shares of MedImmune common stock at a price of $58 per share, for a total consideration of approximately $15.6 billion (including approximately $340m net cash).

2. Schering-Plough - Organon

Acquisition - Headline value: $14,500m
Mar '07

Akzo Nobel announced that it received an offer for the purchase of its wholly owned subsidiary Organon BioSciences NV from Schering-Plough for EUR 11 billion in cash.

3. Siemens - Dade-Behring

Merger - Headline value: $7,000m
Jul '07

Dade Behring Holdings and Siemens have entered into a definitive merger agreement under which Siemens will acquire all of the outstanding shares of Dade Behring for $77.00 per share in cash.

Dade Behring realized sales of approx. $1.7 billion in fiscal year 2006 and an EBIT of $201 million including $21 million restructuring expense.

Closing is expected in the second quarter of fiscal year 2008. Completion of the merger is subject to receipt of regulatory approvals and other customary closing conditions.

4. Merck Serono - Mylan

Acquisition - asset - Headline value: $6,700m

May '07

Mylan Laboratories and Merck KGaA announced the signing of a definitive agreement under which Mylan will acquire Merck's generics business for EUR 4.9 billion ($6.7 billion) in an all-cash transaction.

5. Hologic - Cytyc

Merger - Headline value: $6,200m

Hologic and Cytyc announced a definitive agreement to combine the two companies in a cash and stock transaction.

Under the terms of the merger agreement, Cytyc shareholders will receive 0.52 shares of Hologic common stock and $16.50 in cash for each share of Cytyc common stock they own. Based on the companies’ closing stock prices on May 18, 2007, this represents $46.46 per share of consideration to be received by Cytyc shareholders, or a total consideration of approximately $6.2 billion; the consideration represents a premium of approximately 33%.

6. Nestle - Gerber Products

Acquisition - asset - Headline value: $5,500m

Apr '07

Novartis has signed a definitive agreement to sell its Gerber baby food business to Nestlé for USD 5.5 billion in cash.

7. Warburg Pincus - Bausch & Lomb

Acquisition - Private equity - Headline value: $4,500m

Bausch & Lomb has entered into a definitive merger agreement with affiliates of Warburg Pincus, in a transaction valued at approximately $4.5 billion, including approximately $830 million of debt.

Under the terms of the agreement, affiliates of Warburg Pincus will acquire all of the outstanding shares of Bausch & Lomb common stock for $65.00 per share in cash. This represents a premium of approximately 26% over the volume weighted average price of Bausch & Lomb's shares for 30 days prior to press reports of rumors regarding a potential acquisition of the Company.

8. Mitsubishi - Tanabe

Merger - Headline value: $4,300m

Mitsubishi Pharma and Tanabe Seiyaku along with Mitsubishi Chemical Holdings have reached a basic agreement on the proposed merger between Mitsubishi Pharma and Tanabe Seiyaku, effective October 1, 2007.

9. Eisai - MGI Pharma

Acquisition - Headline value: $3,900m

The merger agreement has been unanimously approved by the MGI PHARMA Board of Directors. The acquisition is expected to occur by means of a tender offer followed by a cash merger, is subject to customary closing conditions and regulatory approvals, and is expected to be completed during the first quarter of 2008.

10. Blackstone - Cardinal Health

Acquisition - asset - private equity - Headline value: $3,300m

Cardinal Health has reached an agreement to sell its Pharmaceutical Technologies and Services segment to The Blackstone Group for approximately $3.3 billion in cash.

11. Roche - Ventana

Acquisition - Headline value: $3,000m

Roche make a tender offer to acquire all outstanding shares of common stock of Ventana Medical Systems.

Under the terms of the tender offer, Roche is offering to acquire Ventana for $75.00 per share in cash, or an aggregate of approximately $3 billion. This offer represents a 44% premium to Ventana's close of $51.95 on June 22, 2007 (the last trading day before Roche submitted its proposal in writing to Ventana) and a 55% premium to its three-month average of $48.30.

12. Celgene - Pharmion

Acquisition - Headline value: $2,900m

Celgene Corporation and Pharmion Corporation have jointly announced the signing of a definitive merger agreement pursuant to which Celgene has agreed to acquire Pharmion.

Under the terms of the merger agreement, Celgene will acquire all of the outstanding shares of Pharmion common stock for $72.00 per share payable in a combination of cash and shares of Celgene common stock. The transaction is expected to be slightly dilutive to earnings in 2008 and accretive in 2009 and beyond.

13. Shire - New River

Acquisition - Headline value: $2,600m

Shire has agreed to acquire New River Pharmaceuticals for $64 per New River share, or approximately $2.6 billion in total, in an all cash transaction unanimously recommended by the Boards of both companies.

14. Nestle - Novartis

Acquisition - asset - Headline value: $2,500m

Novartis has completed the sale of its Medical Nutrition business to Nestlé for USD 2.5 billion, one of the final steps in a divestment program to focus the Group’s strategy on healthcare with pharmaceuticals at the core.

15. Reckitt Benckiser - Adams Respiratory Therpaeutics

Acquisition - Headline value: $2,300m

A definitive agreement under which Reckitt Benckiser will tender for the acquisition of Adams for $60 per share in cash, representing a total consideration for Adams' fully diluted share capital of approximately $2.3bn (1.1bn pounds Sterling). This transaction will be financed by Reckitt Benckiser by cash on hand and existing credit facilities.

16. Inverness Medical Innovation - Biosite

Merger - Headline value: $1,700m

Biosite has received a binding offer from Inverness Medical Innovations to enter into a merger transaction pursuant to which Inverness would acquire 100% of the outstanding shares of common stock of Biosite, other than Biosite shares already owned by Inverness, for $90.00 per share in cash.

17. GSK - Reliant

Acquisition - Headline value: $1,650m

GlaxoSmithKline and Reliant Pharmaceuticals reached an agreement under which Reliant will be acquired by GSK for $1.65 billion in cash.

Reliant, a privately held specialty pharmaceutical company focused on cardiovascular therapies, recorded net sales of $341 million in the nine months ending September 30, 2007, an increase of 62% over the comparable time period a year earlier.

GSK expects the transaction will be slightly accretive to earnings in 2008, excluding integration costs, and will create additional value in following years.

18. Qiagen - Digene

Acquisition - Headline value: $1,600m

QIAGEN and Digene Corp announced a definitive agreement to combine the two companies to create market- and technology-leadership in molecular diagnostics.

Under the terms of the agreement, the transaction will be effected as an exchange offer, followed by a merger of Digene into a subsidiary of QIAGEN. The acquisition consideration will consist of cash and QIAGEN stock, and Digene shareholders may elect to receive for each Digene share either US$61.25 in cash or 3.545 shares of QIAGEN stock, subject to pro-ration so that the total consideration issued for Digene stock consists of 55% cash and 45% QIAGEN stock. Based on the companies' closing stock prices on June 1, 2007, the US$61.25 per share of consideration to be received by Digene shareholders represents a premium of 37% and total equity consideration of approximately US$1.6 billion, which includes US$170 million in cash.

It is anticipated that the stock portion of the consideration will be tax-free to Digene shareholders and QIAGEN shareholders will own approximately 78% of the combined company on a fully diluted basis, and Digene shareholders will own approximately 22%.

19. EQT - Dako

Acquisition - private equity - Headline value: $1,300m

EQT V has signed a definitive agreement to acquire 100% of Dako, a leading Denmark-based supplier of systems for cancer diagnostics in pathology laboratories. The total consideration for the transaction is DKK 7.25 billion.

20. Axcan - TPG Capital

Acquisition - private equity - Headline value: $1,300m

An all-cash transaction with a total value of approximately US$1.3 billion.

Under the terms of the transaction, TPG Capital and its affiliates will acquire all of the common shares of Axcan for an offer price of US$23.35 per common share. The purchase price represents a 28 percent premium over the average trading price of Axcan's common shares on November 28, 2007, the last trading day on the NASDAQ prior to this announcement. Axcan anticipates that the transaction will be completed in the first calendar quarter of 2008.