Control, uncertainty and review across three corporate deals
Maybank's signed minority-stake purchase and the reported AstraZeneca-Bristol Myers Squibb and Prysmian-Atkore talks show the difference between disclosed terms, approval needs and deal-market reporting.
Economics & Markets··Morning
Maybank's transaction is signed and before the regulator
Maybank's transaction has the clearest terms among the three developments. Malaysia's largest bank signed an implementation agreement to buy the 30.95 per cent of insurance and takaful group Maybank Ageas Holdings that it does not already own from Belgium's Ageas for 4.83 billion ringgit. Maybank currently holds 69.05 per cent, so this is less a first acquisition of an outside business than the purchase of a minority interest to reach full control of an existing affiliate. The agreement is between Maybank and Ageas Insurance International NV, and a formal application has been submitted to Bank Negara Malaysia for approval. Adjusted for a dividend of 800 million ringgit, including Ageas's entitlement of 248 million ringgit, the price implies 1.98 times book value and 15.3 times earnings. At this stage the price, the stake being acquired, the existing control structure and the approving authority are known. Completion still depends on the regulator, but the economic terms available to the market have been announced by the parties and placed in a signed agreement.[1]
The pharmaceutical merger has scale but no settled structure
The development involving AstraZeneca and Bristol Myers Squibb is at an earlier and less certain stage. According to a report attributed to the Financial Times, the companies have discussed a possible merger for months and the resulting group could be worth about 400 billion dollars. AstraZeneca's market value is given as roughly 263 billion dollars and Bristol Myers Squibb's as about 133 billion dollars. A possible transaction is expected to combine cash and shares, but its structure has not been settled. The talks could produce an agreement soon, be delayed or fall apart entirely. Because both companies have large oncology divisions, antitrust review as well as financing would help determine the transaction's path. If completed, the combination would create the world's fourth-largest drugmaker by market value. Unlike the Maybank transaction, however, the report contains no signed terms, disclosed ownership percentage or formal application submitted to a regulator. The values describe a possible combined scale based on the companies' current market capitalisations, not a settled purchase price. The headline therefore provides information about magnitude, but not about the probability of completion or the final financing structure.[2]
The Prysmian talks sit at the most uncertain end of the sequence
The report involving Prysmian and Atkore is the least disclosed transaction of the three. Bloomberg, citing people familiar with the matter, said Italian cable maker Prysmian was in advanced talks to acquire US electrical-products manufacturer Atkore. The report appeared on the evening of 2 August and was relayed the same day by the French-language financial service Zonebourse. Neither company issued an official statement, and the price and structure of any transaction were not made public. Prysmian's shares were shown on the page at 120.20 euros, up 39.15 per cent since the start of the year, but that market information does not supply a price for the possible acquisition. The three developments should therefore be read as different information and approval stages, not as one merger-and-acquisition wave. Maybank-Ageas involves a signed contract, a disclosed valuation and a change in control awaiting central-bank approval. The AstraZeneca-Bristol Myers Squibb report identifies potential scale and an antitrust question, but the structure is unsettled and the talks may end. Prysmian-Atkore offers an account of advanced discussions without a price, financing plan or company confirmation. The economic meaning of a corporate deal does not come only from the magnitude in a headline. What each party has signed, which conditions have been disclosed and which regulatory stage lies ahead are the facts that separate these three reports.[1], [2], [3]
Related columns
For more information on this topic, you can read the related columns.
