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TMCNet:  Merger mania sweeps Wall St

[February 15, 2013]

Merger mania sweeps Wall St

Feb 15, 2013 (Daily Mail - McClatchy-Tribune Information Services via COMTEX) -- BILLIONAIRE investment guru Warren Buffett has struck a pounds sterling 18bn deal to buy ketchup giant Heinz, taking the value of multi-billion pound tie-ups involving US firms to pounds sterling 67bn within ten days.

Buffett's baked beans buyout, the largest in the history of the food industry, capped a string of deals unveiled as the US M&A market blossomed into life ahead of spring.

Computer giant Dell kicked off the bonanza earlier this month as founder Michael Dell, Microsoft and private equity group Silver Lake signed a pounds sterling 16bn deal to take it private. Then US cable firm Liberty Global agreed the pounds sterling 15bn takeover of British counterpart Virgin Media.

American Airlines and US Airways later agreed a pounds sterling 7bn merger to create the world's largest airline in an all-share transaction announced yesterday.

The aviation mega-merger came hot on the heels of a deal that saw Comcast, America's largest cable operator, buy the 50pc of NBC that it did not own from General Electric.

Warren Buffett rounded off the hectic period as his investment firm Berkshire Hathaway teamed up with New York-based private equity group 3G Capital, which also owns Burger King.

"This is a tremendous leap forward for the US M&A market," said Amanda Levin, Americas editor of Mergermarket. "For most of 2012 we saw large players sitting on the sidelines," she said, citing the presidential election and fears over the fiscal cliff and ongoing eurozone crisis.

She said conditions had improved markedly and could herald a rebound for deals in 2013.

Heinz boss William R Johnson labelled the takeover of his company "historic" and said the price, a 19pc premium to the firm's all-time high share, was "tremendous value" for shareholders. The deal opens a new chapter in a remarkable 144-year story that began when Henry J Heinz founded a small food-packing company in 1869.

Buffett and 3G Capital managing partner Alex Behring also vowed to respect Heinz' heritage by maintaining its Pittsburgh headquarters and continuing its philanthropic work.

"Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great tasting products," said Buffett, who is worth around pounds sterling 30bn. While the Heinz deal completed a ten-day pounds sterling 67bn deal spree in the US, Britain's M&A landscape is yet to pick up pace. Housebuilder Crest Nicholson re-listed on the stock exchange this week, marking the first major FTSE float of 2013. The listing initially valued the company at pounds sterling 550m, but strong performance on its first day took the market value of the company to pounds sterling 640m by close of play. Publishing and education group Pearson also received clearance from US regulators yesterday to combine Penguin with Random House, owned by Germany's Bertelsmann. Esure, the insurance group that owns Sheila's Wheels and price comparison site Go Compare, is gearing up for a float expected to value the firm at around pounds sterling 1bn.

And mobile phone venture Everything Everywhere is planning a pounds sterling 10bn float for later this year.

Other rumoured floats include Merlin Entertainment, which owns the London Eye and Alton Towers.

___ (c)2013 Daily Mail (London, ) Visit the Daily Mail (London, ) at www.dailymail.co.uk/home/index.html Distributed by MCT Information Services

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