ShareVault

Latest M&A News

• India's capital-hungry airlines
  February 1st, 2010, 12:14 PM (PST)
  As Japan Airlines Corp. touches down in bankruptcy, attention in Asia shifts southeastward toward another low-flying albatross. In India, the government has committed to a $170 million equity infusion for state-owned Air India by March, with the civil aviation minister Friday admitting more money is necessary. Some analysts expect the final bailout to tip $1 billion. All this comes as India's burgeoning private carriers jockey for more and more business and some badly needed equity.
  
  In 2007, the government of Prime Minister Manmohan Singh pushed through the merger of two state-owned carriers: Air India, which flew mainly internationally, and Indian Airlines, operating mostly within India. While Air India held its own, Indian Airlines was almost universally panned for poor maintenance and shoddy service, derisively knocked for offering "toilet class."
  
  The merged corporate entity, National Aviation Co. of India Ltd., is a financial bust. Sydney-based Centre for Asia Pacific Aviation estimates losses for the fiscal year ending March 31 could reach $800 million.
  
  An Indian parliamentary committee on Jan. 21 slammed the merger. There's no inter-interoperability. Air India, the surviving brand, flies Boeing planes, while Indian Airlines is an exclusive Airbus carrier.
  
  Air India finds it increasingly difficult competing with the country's fast-growing private carriers, of which there are three major, publicly traded ones. Both Jet Airways (India) Ltd. and Kingfisher Airlines Ltd. now have a bigger domestic market share than Air India and SpiceJet Ltd. is coming on fast.
  
  Though consumers are flocking to India's private carriers, they haven't escaped financial turbulence, especially in the wake of 2008's oil price surge. The largest, Jet Airways, which also competes internationally, reported a small profit for the nine months ended Dec. 31, 2009, reversing heavy losses in 2008. The company in September said it would raise $400 million in new equity.
  
  SpiceJet also turned around last year and reported a modest profit. In 2008, U.S. private equity shop WL Ross & Co. invested $80 million in SpiceJet for an undisclosed stake, with the option to convert bonds into equity by the end of this year.
  
  Kingfisher, which also flies regionally and to London, lost about $230 million for the nine months ended Dec. 31 and needs a jolt of new funds. Chairman Vijay Mallya said in November he also was close to raising $400 million in private equity.
  
  More than jet fumes keeps this five-year-old carrier going. Kingfisher's parent company is UB Group, India's largest booze purveyor and the world's third-largest spirits manufacturer. - Matt Miller
  
  

• A new CEO for Novartis
  January 28th, 2010, 12:14 PM (PST)
  The latest sign of the diversified business models embraced by most of the world's biggest pharma companies is the resume of the new CEO at Switzerland's Novartis AG (NYSE:NVS). In the contest to succeed Daniel Vasella, who will remain chairman, Joe Jiminez, a consumer products specialist, has beaten out Jeorg Reinhardt, a scientist.
  
  It's only fitting, since in the 14 years Vasella has led it, Novartis has been among the most aggressive diversifiers. Its move earlier this month to pay $39.3 billion for the bulk of eye-care company Alcon Inc. (NYSE:ACL) is the latest example. Still, it may have been a disappointment for Reinhardt, who was the chief operating officer and spent much of his 28-year career at Novartis in research and development. He is leaving Novartis.
  
  Jimenez, a 50-year-old American, has been at Novartis for less than three years. He has been running the pharma division, but over the course of more than two decades as an onward-and-upward executive he has worked at Clorox Co. (NYSE:CLX); run two operating divisions at ConAgra Foods Inc. (NYSE:CAG); was president and CEO of the North America business for H.J. Heinz Co. (NYSE:HNZ); and was a nonexecutive director of British pharma AstraZeneca plc (NYSE:AZN) before joining Novartis. In announcing his promotion Vasella cited Jiminez's international experience in consumer health and pharmaceuticals.
  
  Like many other Big Pharmas, Novartis is losing patent exclusivity on key drugs. Blood pressure medication Diovan ($3.8 billion in sales), leukemia medication Gleevec ($3.3 billion) and breast cancer treatment Femara ($1.2 billion), fall off the patent cliff in 2012, 2013 and 2011, respectively.
  
  Novartis already has one of the widest portfolios of consumer health products, including such well-known names as Bufferin, Excedrin, Ex-Lax and Maalox. Minority Alcon shareholders unhappy about getting a lower price than seller Nestlé SA are making that deal harder to close, but it should ultimately add to the OTC trove.
  
  Jimenez takes over after a good quarter (earnings were $1.26 a share), with good medium-term prospects, analysts reckon. One item they put high on his to-do list: cost cuts in areas like IT. That's something lower-margin, lower-growth consumer businesses have had to get good at. Jimenez is already credited with bringing efficiencies to Novartis's pharma operations. Now he gets an encore on a bigger stage. - Kenneth Bredemeier

• Live Nation's Goldilocks deal
  January 27th, 2010, 12:14 PM (PST)
  How much market power did Live Nation Inc.'s (NYSE:LYV) acquisition of Ticketmaster Entertainment Inc. (NASDAQ:TKTM) give it?
  
  Not so much as to cause the U.S. Department of Justice to block the deal. After imposing some conditions, the DOJ approved the $720 million transaction, and it closed on Jan. 25.
  
  But enough, apparently, to satisfy Liberty Media Corp. chairman John Malone, a genuine connoisseur of the stuff. On Tuesday, Liberty announced plans to tender for up to 34.5 million common shares of Live Nation at a price of $12 per share, a 14.2% premium to the previous day's close.
  
  Liberty already owns 14.6% of concert promoter Live Nation, a result of the 29.7% voting stake it held in Ticketmaster since its spinoff from IAC/InterActiveCorp. To get Liberty's approval of the Ticketmaster deal, Live Nation agreed to let Liberty take its stake in the new company as high as 35%, which it has quickly set about doing.
  
  As The Deal reported Monday, the concessions the DOJ wrested from the companies include selling one of Ticketmaster's subsidiaries and licensing its ticketing software, as well as "conduct remedies," or legally binding promises, that the new company won't retaliate against venues that switch ticketing services or unfairly bundle batches of tickets. Those conditions will remain in place for a decade.
  
  Malone is no stranger to antitrust issues, including those related to vertical integration. In the 1980s he built Tele-Communications Inc. into the nation's largest cable operator and wielded its power to gain stakes in content businesses -- attracting attention from regulators and at one point, an antitrust lawsuit from Sumner Redstone's Viacom Inc. (NYSE:VIA.B).
  
  Ironically, Malone was last heard commenting on market power in November, when he warned that joining General Electric Co.'s (NYSE:GE) NBC Universal Inc. with Comcast Corp. (NASDAQ:CSCMA) (heir to his old cable empire) would give Comcast too much clout. - Kenneth Klee

• Shiseido late to mineral makeup party
  January 25th, 2010, 12:14 PM (PST)
  It's easy to see how Shiseido Co. Ltd. was seduced by Bare Escentuals Inc. Japan's leading cosmetics maker agreed Jan. 15 to buy Bare Escentuals for $1.7 billion, a 41% premium to the target's three-month share price average. Shiseido wants to increase its U.S. footprint and enter the booming mineral makeup market. With a 67% U.S. market share in the category, Bare Escentuals delivers. But like a dusting of expensive powder, that percentage masks some ugly realities Shiseido will face as it works to grow, or even maintain, Bare Escentuals' category dominance.
  
  Bare Escentuals chief executive Leslie Blodgett catapulted her firm -- and herself, for that matter -- to national prominence by plugging the company's powders, eye shadows, blush and other mineral-based products on the shopping network QVC and on infomercials. Both are important distribution channels. Both are hurting.
  
  The audience for infomercials is largely lower-income-bracket consumers. It's a group that has in the past been willing to pony up for Bare Escentuals' cosmetics, priced anywhere from about $15 to more than $70. The recession has changed that. Sales through direct-to-consumer channels, which account for about a third of Bare Escentuals' sales, were off 17% in the most recently ended quarter. Infomercial revenue experienced the most severe decline. QVC and online sales were relatively flat.
  
  At the same time, the mineral makeup category has become crowded with high-profile entrants. Since 2007, Revlon Inc. (NYSE:REV), L'Oréal SA and its Maybelline brand, Johnson & Johnson's (NYSE:JNJ)  Neutrogena and others have launched mineral lines sold at discount retailers at lower prices than Bare Escentuals' products. In an environment where consumers are trading down, prices matter. Even as the economy improves, there's no guarantee that recession-weary shoppers will rush back to higher-end brands.
  
  After several quarters of flat or declining revenue, Bare Escentuals posted third-quarter sales of $135.7 million, up 4% from 2008. It got a boost from the 30 new boutiques it opened in 2009, including a London location, its first company-owned store outside the U.S. It also added 30 new department stores to its European sales network.
  
  Shiseido plans to use its global reach to accelerate Bare Escentuals' international growth. With competition increasing at home, that will be key to making this acquisition, the largest in Shiseido's history, deliver on its promise. - Suzanne Stevens
  
  

• American's vigorous objections to JAL-Delta
  January 25th, 2010, 12:14 PM (PST)
  American Airlines Inc. CEO Gerard Arpey altered the tone of the discussion about the future of Japan Airlines Corp. last week, forgoing the usual sweet-talk about how JAL would be better off continuing to partner with American instead of joining with Delta Air Lines Inc. (NYSE:DAL). Speaking to analysts, Arpey said American "would object vigorously" if JAL, which just filed for a government-assisted bankruptcy reorganization, chooses Delta, as seems likely. "It would be a very unwise course for them," he said.
  
  Leaving aside the logic of bullying a company that you are courting, can Arpey deliver on his threats? That would be up to the regulators -- mainly those at the U.S. Department of Transportation -- to whom he would make those vigorous objections.
  
  American's arguments would stem from the same factors pushing JAL toward its rival. Delta already has a large presence in Tokyo and can offer streamlining opportunities American can't match, necessary if JAL is to eliminate one-third of its workforce and trim its fleet, as it needs to do.
  
  JAL and its U.S. partner are expected to seek U.S. government approval for antitrust immunity to coordinate schedules and pricing on trans-Pacific routes. American can rightly argue that a JAL tie-up with Delta would reduce Japan-U.S. competitors from three to two, with the second competitor being the trio of Continental Airlines Inc., United Airlines Inc. and All Nippon Airways Co. Ltd., joined in the Star alliance and separately seeking immunity.
  
  But fears of a duopoly probably won't outweigh the diplomatic leverage that the Japanese government, which is heavily invested in JAL, wields with Washington. If Tokyo chooses Delta, it is sure to remind Washington that the two countries have a tentative air service liberalization deal that is subject to both All Nippon and JAL achieving antitrust immunity.
  
  Moreover, a competitive duopoly isn't a monopoly. American says JAL-Delta would control 60% of the market between the countries, but that number figures to shrink along with JAL and is reduced considerably if flying from Hawaii is excluded. The resulting market looks to be much more problematic for American, the lone major U.S. airline on the outside looking in, than for consumers.
  
  By objecting loudly, American might win landing slots or other concessions that would help if it has to scramble to build its own Asian network. But this jilted suitor seems unlikely to prevent JAL and Delta from walking down the aisle. - Lou Whiteman
  
  

• Airline shake-up in Japan
  January 22nd, 2010, 12:14 PM (PST)
  Japan Airlines Corp. is a vestige of another time and place. So, too, are the highly protectionist policies that govern airline access to Japan. JAL's bankruptcy filing this week, which follows by a month the partial opening of Japan's closed skies, means commercial aviation in the world's second-largest economy will begin a desperately needed catch-up. Foreign carriers and new, low-cost domestic airlines will benefit.
  
  And JAL and domestic rival All Nippon Airways Co. -- a lumbering, inefficient duopoly -- will suffer. Decades back, Asian carriers such as Cathay Pacific Airlines and Singapore Airlines began to outdistance JAL and ANA in every conceivable measure, including profitability. The more recent advent of low-cost carriers in other Asian-Pacific nations such as Malaysia and Australia only exacerbated the performance gap.
  
  The Japanese government zealously protected the status quo. That meant the periodic financial propping up of JAL. Bureaucrats stifled competition, both local and international. Domestic upstarts didn't stand a chance. According to the Sydney-based Centre for Asia Pacific Aviation, low-cost carriers in Japan accounted for a minuscule 4.7% of domestic traffic last year.
  
  The new government of Prime Minister Yukio Hatoyama finally broke through the resistance. It refused to keep JAL out of bankruptcy even as it agreed to an open-skies agreement with the U.S. The treaty removes at least some of the trans-Pacific route restrictions at a time when Tokyo's two airports are expanding capacity.
  
  Under the court-led, government-supervised restructuring, JAL has vowed over the next three years to ditch 15,000 employees, more than 50 planes and dozens of unprofitable routes. It also promised to control runaway pension liabilities.
  
  ANA, which lost $277 million in the first half of its fiscal year and which must deal with its own boated payroll and pension woes, is in a panic. CEO Shinichiro Ito warned Wednesday of a price war once JAL sheds its crippling debt. Japanese consumers should rejoice.
  
  According to the Asia Pacific Aviation Centre, Japan's Ministry of Transport is reviewing its opposition to low-cost carriers. In the aftermath of the JAL bankruptcy filing, shares in Japan's only low-cost carrier of any size, Skymark Airlines, took off. With good reason. - Matt Miller

• Toyota's lithium mine
  January 22nd, 2010, 12:14 PM (PST)
  Toyota Motor Corp. (NYSE:TM) this week gave an indication of just how important electric cars are to its future, taking the unusual step of investing in a northern Argentina mining project where a key ingredient of next-gen auto batteries will be mined.
  
  Toyota Tsusho, an affiliate of the world's largest automaker, is forming a joint venture with Australian-listed Orocobre Ltd. to develop the Salar de Olaroz lithium mining project. The deal calls for Tsusho to fund a feasibility study for the project and eventually take a 25% stake in it.
  
  In making the investment, Toyota appears more concerned with future prices for lithium than it is with cornering the market or even just guaranteeing supply. Battery technology remains the most vexing and costly aspect of electric cars, and if demand for these vehicles grows at the rate some predict, the world will need new sources of lithium in the years ahead.
  
  Toyota understands the high cost of lithium all too well. Last fall, the automaker surprised many when it said that for now it would stick with nickel metal hydride batteries in its Prius sedans, a move attributed by outsiders to the complexities and expense associated with lithium designs.
  
  But lithium is seemingly in Toyota's future. Lithium batteries offer a better charge and lighter weight, and while there are plenty of companies looking at ways to improve traditional batteries or experimenting with other chemistries, lithium use is projected to ramp up sharply. Consulting firm A.T. Kearney expects the global lithium-ion auto battery market to grow from $31.9 million last year to $21.8 billion in 2015 and $74.1 billion by 2020.
  
  Just how difficult it will be to find lithium for all those batteries is uncertain. Analysts say that there is plenty of the ultra-light metal available on the planet to be mined. But some, including consultant William Tahil of Meridian International Research, have argued that much of that world reserve will be difficult to extract in a cost-effective manner.
  
  Toyota is undoubtedly eager to see lithium supplies bolstered by new sources. On Wednesday, it showed it was willing to put some money where its mouth is. - Lou Whiteman

• Heineken pays in stock
  January 12th, 2010, 12:14 PM (PST)
  A common worry about acquisitions done for stock is that they make it too easy to overpay -- a concern Warren Buffett expressed rather emphatically to Kraft Foods Inc. (NYSE:KFT) CEO Irene Rosenfeld last week in a statement arguing against Kraft issuing shares in its bid for Cadbury plc (NYSE:CBY). The risk is compounded when the shares are undervalued, as both Buffett and Rosenfeld believe Kraft's to be.
  
  So perhaps there's something to be learned from investors' enthusiastic reaction to the news that Heineken NV is buying the beer operations of Fomento Económico Mexicano SAB de CV, or Femsa, in an all-stock deal valued (including the assumption of debt) at €5.3 billion ($7.7 billion). Investors pushed Heineken shares up 3.4%, or €1.11, to €34.03, and shares in the holding company up 1.4%, or €0.42, to €29.79, on Monday.
  
  Is it that they think Heineken's shares are fully valued? Maybe, maybe not. Heineken is now up about 42% from the depressed levels of a year ago, but it has lagged rivals SABMiller plc (the rival bidder for Femsa) and Anheuser-Busch InBev NV (NYSE:BUD).
  
  More likely investors think the deal addresses -- at a good price, and without adding to the debt load Heineken took on last year to buy a chunk of Scottish & Newcastle plc -- the Dutch brewer's major weakness compared to its global rivals. That would be the under-representation of Heineken in faster-growing emerging markets.
  
  Now, in exchange for 20% of the company, Heineken gets one of only two brewers in thirsty Mexico; the right to sell Dos Equis and other Femsa brands in the U.S. market, still the world's richest; and a modest position in Brazil, where mighty AB InBev holds sway but where people might like to drink more Heineken.
  
  Terms call for issuance of 86 million new shares in Heineken, plus the delivery of an additional 29 million existing Heineken shares over the next five years. There's also an exchange at the holding company level.
  
  Heineken chairman Jean-François van Boxmeer reckons the opportunity warrants the first share deal ever for the holding company, and the first since 1969 for Heineken. An endorsement of sorts on the price came from Femsa investors, who sold down that company's shares on the news.
  
  No doubt Rosenfeld -- who also proposes to issue shares to gain exposure in emerging markets -- is watching with interest, if not a little envy. - Kenneth Klee
  
  
  

• Generics deals are becoming generic
  January 7th, 2010, 12:14 PM (PST)
  Side effects may include irony and narrowing margins. But for Big Pharma, buying makers of generic drugs is one of the preferred therapies for the revenue loss they face when patents on their blockbuster medicines expire.
  
  Even generic subsectors like injectables are getting crowded. Research & Markets notes the growing competitive dealscape, pointing out that Pfizer's agreements with Aurobindo Pharma Ltd. and Claris Lifesciences Ltd. have been strengthened and Novartis AG's (NYSE:NVS) acquisition of Ebewe Pharma GmbH has improved its Sandoz generics unit's access to injectable products. Also, Akorn-Strides LLC and Fresenius Kabi AG are new names to the top flight, with the latter's acquisition of Dabur Pharma and APP Pharmaceuticals Inc., putting it in a strong position in the U.S.
  
  Pfizer's latest deal with India's Strides Arcolab Ltd. also gave it an injectable boost as it strives to become one of the top five players in that subsector in five years. In December, global market leader for generic injectable pharmaceuticals, Hospira Inc. (NYSE:HSP), agreed to buy the generic injectable pharma business of India's Orchid Chemicals & Pharmaceuticals Ltd. for $400 million.
  
  Sanofi-Aventis SA (NYSE:SNY) is a perfect example of the general generics push. Last year, it acquired Brazilian generic drugmaker, Medley SA for about $680 million, bought Mexican generic drug maker Laboratorios Kendrick and spent $1.9 billion to acquire Czech drugmaker Zentiva NV, making it the world's No. 11 maker of generic medicines. In May, GlaxoSmithKline plc (NYSE:GSK) bought a 16% stake in Africa's biggest generic drug maker after Aspen Pharmacare Holdings Ltd. In July, Glaxo bought Bristol-Myers Squibb Co.'s (NYSE: BMS) branded generics drugs business in Lebanon, Jordan, Syria, Libya and Yemen.
  And Merck & Co. (NYSE:MRK) made a bet on biosimilars. Merck spent $130 million on Insmed Inc.'s portfolio of follow-on biologic (or biosimilar) drugs and its commercial manufacturing facilities in Boulder, Colo. Biosimilars are copies of off-patent drugs. They're like generic drugs but don't face the same regulation as generics, yet. The other catch is they're expensive to produce.
  
  As part of properly managed regimen of diversification, generic deals can be part of a healthy lifestyle for many Big Pharmas. Most are already asking their strategists if generics are right for them - Baz Hiralal
  
  Also read: Dealmaking at the edge of the patent cliff
  
  

• Wyeth is not enough for Pfizer
  January 7th, 2010, 12:14 PM (PST)
  Pfizer Inc. (NYSE:PFE) continues to prepare for doomsday in 2012, by which time the patent on cholesterol drug Lipitor will expire. The drug accounts for 25% of Pfizer's annual revenues, and despite the New York drug giant's $68 billion acquisition of Wyeth, it's looking for more opportunities.
  
  Like its rivals, Pfizer is looking overseas for help and is trying to boost its presence in generics -- a market where competition is rapidly increasing. The biggest recent examples include Sanofi-Aventis SA's (NYSE:SNY) $680 million acquisition of Brazilian generic drugmaker Medley SA and its $1.9 billion deal for Czech drugmaker Zentiva NV. Companies like Teva Pharmaceutical Industries Ltd. (NASDAQ:TEVA) and GlaxoSmithKline plc (NYSE:GSK) have also made generics plays via M&A.
  
  The latest deal is a big one as far as Pfizer's generics presence goes. It is collaborating with India's Strides Arcolab Ltd., where Pfizer will commercialize off-patent sterile injectable and oral products in the U.S. through its established products business unit. That unit only launched 10 months ago, and the deal brings the total number of products in-licensed by the unit to more than 200. The Strides agreement added 40 off-patent products, many which are oncology therapeutics. We've tracked a flurry of transactions in the oncology sector.
  
  David Simmons, president of Pfizer's established products unit, told Reuters Pfizer wants to be among the world's top five in the injectables market in five years. Research & Markets says that as the generic industry matures, companies are increasingly looking toward alternative drug delivery technologies as a route to a competitive edge in a crowded market. R&M also notes Pfizer's agreements with Aurobindo Pharma Ltd. and Claris Lifesciences Ltd. have been strengthened.
  
  Pfizer's CEO Jeffrey Kindler regrets relying so heavily on the Lipitor blockbuster, recently saying at a Reuters Health Summit that "no one product will represent more than 10% of revenue." - Baz Hiralal
  

• Value of United's Japan slots put at $873M
  January 6th, 2010, 12:14 PM (PST)
  Japan Airlines Corp. continues to struggle through its government-backed restructuring. Tuesday's news is that pension fund members have voted in favor of cutting their benefits.
  
  American Air Lines Inc. and Delta Air Lines Inc. (NYSE:DAL) continue to vie for the right to be JAL's partner on flights between the U.S. and Japan and around Asia. Both have pledged more than $1 billion to JAL for the privilege, with Delta deemed to have a good chance of supplanting American, the incumbent.
  
  And now here comes UAL Corp.'s (NASDAQ:UAUA) United Airlines with a (purely coincidental) reminder that its two rivals are jousting over something scarce and valuable. United -- which with its partner All Nippon Airways Co. handles about a third of the U.S.-Japan traffic -- may put its Japan slots and routes up as collateral for a $500 million bond issue, according to a Bloomberg report. Their value, according to the consultants at SH&E Inc., is $873 million.
  
  Japan may be struggling to avoid a third decade of economic torpor. But it's still the world's second-largest economy, at least for now, and flying people there is still a pretty good business. - Kenneth Klee
  
  
  
  
  

• Apple buys Quattro, Millennial next?
  January 6th, 2010, 12:14 PM (PST)
  It wasn't very surprising that Apple Inc. (NASDAQ:AAPL) acquired mobile advertising company Quattro Wireless, which confirmed the deal with a Happy New Year blog (we suppose that's not odd for a startup, but we're still waiting to hear from Apple). AllThingsDigital and The New York Times cited sources putting the deal price between $275 million and $300 million.
  
  That's a lot cheaper than the $750 million Google Inc. (NASDAQ:GOOG) paid for mobile ad leader AdMob Inc. An industry Web site says Apple is getting Quattro at a steal, since it is a complete package, coming with an already impressive client list, including global brands like Ford Motor Co. (NYSE:F), Microsoft Corp. (NASDAQ:MSFT), Walt Disney Co. (NYSE:DIS) and Visa Inc. (NYSE:V), as well as digital brands like NetFlix Inc. (NASDAQ:NFLX). Three-year-old Quattro's last round of funding -- a $10 million Series C -- was led by Highland Capital Partners and Globespan Capital Partners.
  
  Apple actually looked at buying AdMob but probably didn't want to shell out that much money. The FTC happens to be looking at the AdMob deal for potential antitrust issues so maybe Apple's buy is a good thing for Google -- but leave that speculation to the arbs. The deal makes sense for Apple. Everyone else is making money selling advertising against its iPhone apps, so why not them?
  
  Millennial to Yahoo!, Microsoft?
  
  Besides Quattro, mobile advertiser Millennial Media was on our next-to-be-acquired list, along with some specialty networks including Jumptap, InMobi and MobClix. You can read more about the potential acquisition targets here. But who would acquire? Microsoft, AOL and Yahoo! Inc. (NASDAQ:YHOO) bought mobile advertising networks two years ago: Screen Tonic, Third Screen Media and Actionality, respectively. Microsoft and Yahoo! are the market leaders in mobile ad networks, but it wouldn't be surprising if they picked up one of those startups. Investors have faith; Millennial received a $16 million Series C on Nov. 17, which it said it would use to expand its presence in London. The round was led by New Enterprise Associates, joined by existing investors Bessemer Venture Partners, Columbia Capital and Charles River Ventures.
  
  It may not be as lucrative as Web search ads on a computer, but there's money to be made. Apple announced Tuesday that more than three billion apps have been downloaded from its App Store by iPhone and iPod touch users worldwide.
  
  And don't forget about the nascent Android apps. Also on Tuesday, Google unveiled its "superphone," a title which ZDNet doesn't think it deserves. Even if an iPhone killer does come along, Apple is trying to move beyond cell phones and smartphones with a much-anticipated Tablet device. Who knows what size it is, but if Apple manages to provide a bigger screen with elegance, portability and speed, that equals bigger ads and more money for the companies that provide them. - Baz Hiralal
  
  Also see:
  
  • Next up on mobile ad acquisitions
  • Google, Apple plan mobile ad attack
    
  
  

• Chesapeake JVs could ward off potential suitors
  January 6th, 2010, 12:14 PM (PST)
  Chesapeake Energy Corp.'s (NYSE:CHK) joint venture with French oil giant Total SA in north Texas' Barnett shale was heralded by analysts for the cash influx it will deliver and its ability to keep Chesapeake's natural gas exploration and production programs humming. 
  
  
  Under terms of the deal, Total will pay the Oklahoma City oil and gas explorer $800 million when the deal closes and will pay 60% of Chesapeake's drilling and completion expenses up to $1.45 billion. This comes at a time when Chesapeake can't do it alone because of low natural gas prices. 
  
  
  "It's a relatively small deal, but [it] finally gets CHK [Chesapeake] back to the point where quality assets [and] big production growth ... can become the story, instead of balance sheet and equity overhang fears," Tudor Pickering Holt & Co. Securities Inc. wrote in a report Tuesday. 
  
  
  At the same time, however, the research firm wondered if the JV, one of several in which Chesapeake is involved, will make the company a less attractive acquisition target. The partnerships would certainly complicate any effort to sell the Barnett or any other of its JV'd assets in the future, much less the entire company, with other owners in the mix. 
  
  
  That said, given the plethora of production expected from emerging shale plays and an influx of liquefied natural gas that's expected to hit our shores in the coming years, it's unlikely that natural gas prices will rise significantly anytime soon. Meaning that JVs will likely remain an attractive tool for Chesapeake, as long as it has the assets to attract deep-pocketed partners. - Claire Poole

• Dealmaking at the edge of the patent cliff
  January 6th, 2010, 12:14 PM (PST)
  With Novartis AG (NYSE:NVS) announcing step two of its acquisition of Alcon Inc. (NYSE:ACL) from Nestle SA Monday -- step one having come in July of 2008 -- we're reminded that Big Pharmas have been wheeling and dealing for a while now to cope with the revenue loss they face from top-selling medicines going off patent. Biologics, vaccines, generics, antibiotics, consumer health products, devices -- you name it, somebody's pursuing it, via outright acquisition or a licensing deal.
  
  And let's not forget megamergers like Pfizer Inc. (NYSE:PFE)-Wyeth and Merck & Co. (NYSE:MRK)-Schering-Plough Corp., which may have some or all those elements and big cost synergies besides. Or the cure-all embraced by nearly all industries these days -- expansion in higher-growth developing economies.
  
  All this is great news for bankers, lawyers and deal professionals, not to mention those who write for them. As for the companies and their shareholders, the results are mixed. Take, for example, the case of the U.K.'s  AstraZeneca plc (NYSE:AZN).
  
  AstraZeneca made a big move in 2007, acquiring U.S. vaccine maker MedImmune Inc. for about $15.6 billion in cash. A big bet seemed to be called for: According to Bloomberg data, medicines that generated 62% of AstraZeneca's 2008 revenue face competition from lower-priced copies by 2014.
  
  The MedImmune deal put AstraZeneca on par with GlaxoSmithKline plc (NYSE:GSK), Sanofi-Aventis SA (NYSE:SNY) and Novartis AG (NYSE:NVS) in vaccines. But MedImmune's  product line was maturing. Investors have not been impressed with AstraZeneca's strategy, as evidenced by its stock price, which hasn't shown much life since 2006. In a Dec. 8 note, Sanford C. Bernstein analyst Tim Anderson named AstraZeneca, Eli Lilly and Co. (NYSE:LLY) and Bristol-Myers Squibb Co. (NYSE:BMY) as the "worst positioned" to handle the so-called patent cliff. 
  
  AstraZeneca keeps working to improve its position, recently announcing the acquisition of France's Novexel SA for up to $505 million as part of a plan to develop an important new class of drugs to fight antibiotic-resistant bacteria.
  
  AstraZeneca is also keen on licensing deals. It recently collaborated with Targacept Inc.  (NASDAQ:TRGT) to develop and commercialize a late-stage investigational treatment for depression, in a deal worth up to $1.2 billion. Also in early December, Trellis Bioscience Inc., a privately held South San Francisco, Calif., pharmaceutical developer, agreed to a $338 million deal that will give MedImmune the right to develop its antibodies aimed at fighting a common childhood respiratory virus.
  
  AstraZeneca is focused on getting late-stage drugs. Corporate business develeopment VP Shaun Grady told Bloomberg News it would focus on its key disease areas, which include cancer, respiratory illnesses and mental illness. But the company will need to move quickly lest good candidates be grabbed by competitors. Like its rivals AstraZeneca still has  a few years to ride major drug sales. But the clock is ticking. - Baz Hiralal
  
  Also see: Healthcare deals are still out there
  
  

• Dow Jones exec departs amid reorg
  January 5th, 2010, 12:14 PM (PST)
  Dow Jones & Co. is combining its consumer media and enterprise media groups, a move that has reportedly cost Clare Hart her job. Hart, a long-time Dow Jones executive, had been president of the enterprise media group. 
  
  
  We first spoke to Hart following her successful run as chief executive of Factiva Inc, a joint venture between Dow Jones and Reuters Group plc. The subscription-based electronic news retrieval and research service had a profitable seven-year run before Dow Jones bought Reuters' 50% share for $160 million in 2006. Following the transaction, Hart moved over to run the enterprise media business, where she led a number of strategic initiatives to expand the group's product offerings and global footprint. 
  
  
  The reorganization will bring the enterprise group's Factiva, Dow Jones newswires and market index businesses, and the consumer group assets including The Wall Street Journal, Barron's and MarketWatch under a single management structure. Todd Larson, formerly president of the consumer group, will become president of Dow Jones. You can find more details of personnel appointments in this memo to staff from Dow Jones CEO Les Hinton (via paidContent.org). 
  
  
  The new structure will allow Dow Jones to more quickly adapt to consumer demands, wrote Hinton: "To be successful, we need a structure and focus that makes us faster and better than our rivals in identifying and meeting our customers' needs." Hinton stresses the changes are not about cutting costs, and the memo doesn't mention job cuts. As the businesses are merged, however, it's understandable if employees are concerned. - Suzanne Stevens