2011's Biggest Mergers and Acquisitions

By Matt Cavallaro | December 30, 2011 AAA

Mergers & acquisitions (M&A) rebounded in a big way this year, led by energy and power companies. With billions in cash sitting on the books of major corporations, the environment was ripe for an M&A turnaround from previous years. Here's a look at some of the biggest deals of 2011. (For related reading, see The Buy-Side Of The M&A Process.)

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Energy M&A Leads

The energy sector accounted for 23% of the total deal value disclosed this year, according to a PricewaterhouseCoopers report. Coal and natural gas assets were coveted during the year. January saw the combination of a couple of big Virginia-based coal producers when Alpha Natural Resources, Inc. (NYSE:ANR) bought Massey Energy for $8.28 billion. Global mining, oil and gas giant BHP Billiton Limited's (NYSE:BHP) $14.9 billion purchase of Petrohawk Energy Corporation increased the Australia-based company's exposure to shale natural gas resources.

In a move related to the energy group, a huge acquisition in the utility sector underlined what a good year it was for utilities when Duke Energy Corporation (NYSE:DUK) bid $25.53 billion for Progress Energy, Inc. (NYSE:PGN). The merger would create the largest utility company in the United States.

Healthcare M&A Strong
Right behind energy, Healthcare represented 15% of total deal value. One of the biggest deals of the year happened over the summer when Express Scripts, Inc. (Nasdaq:ESRX) agreed to purchase Medco Health Solutions Inc. (NYSE:MHS) for $34.3 billion. The takeover would create the largest U.S. pharmacy benefits manager.

It took two tries to complete Paris-based pharmaceutical leader Sanofi (NYSE:SNY) acquisition of biotech firm Genzyme with a deal valued at $19.64 billion. Johnson & Johnson (NYSE:JNJ) added to its medical devices portfolio with the $21.3 billion purchase of Synthes. Walgreen Company (NYSE:WAG), the largest drugstore chain in the United States, bought internet health and beauty care products retailer Drugstore.com for $396.9 million. The November purchase of pharma company Pharmasset, Inc. (Nasdaq:VRUS) by Gilead Sciences, Inc. (Nasdaq:GILD) rounded out a big year for M&A in the healthcare space. (To learn more, read Mergers and Acquisitions.)

Tech M&A Too
Not to be forgotten, there were several major deals in the information technology space this year that really changed the landscape. Analog device and subsystems manufacturer National Semiconductor was bought by Texas Instruments Incorporated (NYSE:TXN). Early in the year, Microsoft Corporation (Nasdaq:MSFT) bought video chat company Skype for $8.5 billion.

In telecom, the troubled deal for T-Mobile USA, Inc. proposed by AT&T Inc. (NYSE:T) is in jeopardy. As of mid-December, the proposed $39 billion bid is effectively dead, and AT&T is now in the position of deciding whether to pay a hefty breakup fee or see if an alternative deal can be worked out with Deutsche Telekom. The acquisition would have created the largest U.S. wireless carrier. (For related reading, see 8 Reasons M&A Deals Fall Through.)

In addition to failed deals, there were some head-scratchers in the tech sector too. Struggling internet media company AOL, Inc. (NYSE:AOL) bought left-leaning HuffingtonPost.com for $300 million.

The Bottom Line
There were so many big deals in 2011 that it's hard to list them all. The Charles Schawb Corporation (NYSE:SCHW) bought OptionsXpress; AMB combined with ProLogis Inc (PLD) in a reverse merger. Berkshire Hathaway Inc. (NYSE:BRK.A) bought lubricant additive maker Lubrizol amid controversial circumstances. The list goes on. Will the big deals of 2011 set the stage for another explosive M&A year in 2012? (To learn more, check out What Makes An M&A Deal Work?)

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At the time of writing, Matt Cavallaro did not own shares in any of the companies mentioned in this article.

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