BP to sell Alaska business to Hilcorp in $5.6bn deal

BY Fraser Tennant

In a transaction valued at $5.6bn, BP is to sell all of its Alaska operations – including interests in the giant Prudhoe Bay field and Trans Alaska Pipeline – to oil and natural gas exploration and production company Hilcorp Energy.

The deal forms a significant part of BP's plan to divest $10bn of assets over 2019 and 2020.

The sale of BP’s Alaska business to Hilcorp includes its entire upstream and midstream business in the state, including BP Exploration (Alaska) Inc., which owns all of BP's upstream oil and gas interests in Alaska, and BP Pipelines (Alaska) Inc.'s interest in the Trans Alaska Pipeline System (TAPS).

Hilcorp’s affiliate, Hilcorp Alaska, is based in Anchorage and has been operating in the state since 2012. The company currently produces more than 75,000 barrels of oil-equivalent per day in gross production.

"Alaska has been instrumental in BP's growth and success for well over half a century and our work there has helped shape the careers of many throughout the company,” said Bob Dudley, group chief executive of BP. “We are extraordinarily proud of the world-class business we have built, working alongside our partners and the State of Alaska, and the significant contributions it has made to Alaska's economy and America's energy security.

“However, we are steadily reshaping BP and today we have other opportunities, both in the US and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment,” he continues. “This transaction also underpins our divestment programme, further strengthening our balance sheet and enabling us to pursue new advantaged opportunities for BP's portfolio within our disciplined financial framework.”

The deal is subject to state and federal regulatory approval and is expected to be completed in 2020.

“Our people have achieved incredible success over the decades developing and maintaining these hugely important assets,” said Janet Weiss, regional president of BP Alaska. “We are confident this sale is in BP’s and the state’s best interests and the business will be best positioned for the future with Hilcorp.”

News: BP to quit Alaska after 60 years with $5.6 billion sale to Hilcorp

eOne’s the one for Hasbro

BY Richard Summerfield

Hasbro Inc has announced a deal to acquire Entertainment One Ltd (eOne) in an all-cash transaction valued at $4bn.

Under the terms of the agreement, eOne shareholders will receive £5.60 in cash for each common share of eOne held, which represents a premium of 26.4 percent to eOne’s close of £4.43 on Thursday, the day before the deal was announced, and a 31 percent premium to the company’s 30-day volume weighted average price as of 22 August 2019. The deal is expected to close in the fourth quarter of 2019.

Hasbro will finance the deal with debt and $1bn to $1.25bn in cash from equity financing, the companies said. Hasbro expects to see annual run rate synergies of about $130m by 2022. The deal is the biggest merger in Hasbro’s history

“The acquisition of eOne adds beloved story-led global family brands that deliver strong operating returns to Hasbro’s portfolio and provides a pipeline of new brand creation driven by family-oriented storytelling, which will now include Hasbro’s IP,” said Brian Goldner, chairman and chief executive at Hasbro. “In addition, Hasbro will leverage eOne’s immersive entertainment capabilities to bring our portfolio of brands that have appeal to gamers, fans and families to all screens globally and realise full franchise economics across our blueprint strategy for shareholders. We are excited to welcome eOne’s talented employees from around the world into the Hasbro family.”

“Hasbro’s portfolio of integrated toy, game and consumer products, will further fuel the tremendous success we’ve achieved at eOne,” said Darren Throop, chief executive at eOne. “There’s a strong cultural fit between our two companies; eOne’s stated mission is to unlock the power and value of creativity which aligns with Hasbro’s corporate objectives. eOne teams will continue to do what they do best, bolstered by the access to Hasbro’s extensive portfolio of richly creative IP and merchandising strength. In addition, the resulting expanded Hasbro presence in Canada through eOne’s deep roots will bring world class talent and production capabilities to Hasbro. Along with our leadership team, I look forward to working with Hasbro on our joint growth and success for many years to come.”

News: Hasbro takes home Peppa Pig, PJ Masks in $4 billion eOne deal

Global insurance M&A hits four-year high

BY Richard Summerfield

The level of global insurance industry M&A has increased considerably in recent years, according to Clyde & Co’s ‘Insurance Growth Report 2019’.

There were 222 completed insurance M&A deals worldwide in the first half of 2019, up from 196 in the second half of 2018, a 13.2 percent increase – the highest increase in the volume of transactions since the first half of 2015. The figure also represents the fourth consecutive six-month period of M&A growth. Mega-deals have continued to be a factor in dealmaking in the insurance space, with 11 deals in H1 2019 valued at over $1bn. There were 18 in the whole of 2018.

“Despite recent signs of market hardening, delivering a positive result for shareholders remains challenging and M&A is an attractive strategy to deliver growth for re/insurance businesses around the world,” said Ivor Edwards, a partner and European head of the corporate insurance group at Clyde & Co.

Europe has seen a rush of completed deals that had been put on hold due to Brexit preparations, the report notes. Europe saw the biggest increase in M&A activity – up 39.7 percent – with 88 completed deals in H1 2019 compared to 64 in H2 2018. France led Europe in terms of insurance M&A activity and was the second most active country worldwide, just behind the US. The UK and Spain were next in the list.

Away from Europe, dealmakers have been buoyed by a combination of strong economic growth, notably in the US, and positive growth prospects for the insurance sector. In the Asia-Pacific region, 38 insurance M&A deals were recorded during H1 2019, marking the fourth straight period of rising deal volume to the highest level since 2015. Japan led the region in terms of deals made, followed by Australia and India.

Though the US remains the world’s most active nation in terms of M&A volume, it saw its third consecutive drop in H1 2019, with 66 deals completed. Geopolitical and financial uncertainty relating to potential trade wars involving the US may have rattled investors and could make dealmakers more cautious in the second half of 2019.

Report: Insurance Growth Report 2019

Bayer and Lankess sell Currenta stakes to MIRA in €3.5bn deal

BY Fraser Tennant

In a deal valued at €3.5bn, German chemical groups Bayer AG and Lanxess AG are to sell their stakes in chemical park operator Currenta to infrastructure investor Macquarie Infrastructure and Real Assets (MIRA).

Managing and operating infrastructure, energy supply and other essential services across chemical parks in Leverkusen, Dormagen and Krefeld-Uerdingen, Currenta is a joint venture of Bayer, with a 60 percent stake, and Lanxess, with 40 percent.

“We are delighted to announce that in MIRA, the world’s leading infrastructure asset manager, we have found the right partner to drive the successful development of Currenta while leveraging its international expertise,” said Dr Hartmut Klusik, a member of the board of management and labor director at Bayer. “In addition, MIRA has a long term focus and will also be a reliable employer for Currenta’s employees.”

Active in Germany for 30 years, MIRA has extensive experience in Currenta’s core business areas including utilities, transport, logistics, storage, waste management and treatment services. Through these investments MIRA has demonstrated its commitment to sustainability and helping to create stronger businesses.

“MIRA is delighted to partner with Bayer and Lanxess to acquire Currenta,” said Hilko Schomerus, head of Germany at MIRA. “As a long-term owner of essential infrastructure, MIRA is committed to working with the Currenta management team to ensure the longevity and ongoing success of the business for both customers and employees.”

As one of Currenta's main customers, Lanxess will provide MIRA with operational support during the transition phase and will continue to hold its stake in Currenta for several months longer than Bayer, which expects its part of the transaction to close in the fourth quarter of 2019.

“With MIRA as an experienced and strong partner and with the long-term contract package, we have achieved this and secured a reliable infrastructure at competitive conditions for the future,” said Matthias Zachert, chairman of the board of management at Lanxess. “At the same time, the sale of our stake will give us additional financial leeway to drive forward our growth course in specialty chemicals.”

The transaction is expected to be fully completed by the end of April 2020.

News: Lanxess, Bayer sell chemical park operator to Macquarie for $3.9 billion

EssilorLuxottica’s GrandVision

BY Richard Summerfield

Franco-Italian eyewear manufacturer and retailer EssilorLuxottica is to acquire Dutch rival GrandVision in a deal worth $8bn.

EssilorLuxottica will pay at least €28 a share for investment firm HAL Optical Investments’ roughly 77 percent stake in Grandvision. Following completion of the deal, EssilorLuxottica will be obliged to make an offer for the rest of GrandVision’s shares.

However, the transaction is expected to attract considerable regulatory scrutiny, particularly in light of the lengthy review that European antitrust authorities undertook when approving the $53bn merger between Essilor and Luxottica in 2017. Furthermore, EssilorLuxottica has already been criticised for its alleged prohibitive prices and bullying tactics. The addition of GrandVision to the company’s portfolio of brands may be unacceptable to regulators.

If approved, the deal will see EssilorLuxottica acquire 7200 new stores globally, over 37,000 employees and €3.7bn in annual revenue.

“This acquisition is another step towards our ambition to eradicate poor vision in the world before 2050,” said Hubert Sagnières, executive vice chairman of EssilorLuxottica. “Following the combination with Luxottica, it‘s a milestone in our vision of reshaping the optical industry with the aim to provide all consumers of the world a better optical experience with higher quality eyewear. We look forward to welcoming the 37,000 employees of GrandVision to the growing EssilorLuxottica family. Together, we will have an even stronger voice to champion better vision everywhere in the world.”

 “The future integration of GrandVision with EssilorLuxottica brings new opportunities to GrandVision’s business, its well-established retail banners, stores, employees and all our stakeholders,” said Stephan Borchert, chief executive of GrandVision. “Furthermore, it will create a truly global eyecare and eyewear company that is ideally positioned to capture changing consumer needs and behaviors, and provide its customers with a high quality optical omni-channel customer experience. This transaction is expected to provide value to GrandVision’s shareholders, while allowing for the acceleration of GrandVision’s growth strategy through the expansion of our store network and online platforms. EssilorLuxottica’s interest in joining forces with GrandVision is a clear recognition of GrandVision’s successful strategy, our state-of-the-art retail platform and our people. We look forward to joining forces with EssilorLuxottica in what will be an exciting new chapter ahead.”

At the time of announcing the deal for GrandVisison, EssilorLuxottica also reported revenues of €8.78bn during the first half of the year, up 7.3 percent.

News: EssilorLuxottica sets sights on retail dominance with $8 billion GrandVision deal