Blog » Industry Review » Industry Week in Review – October 12, 2012

Industry Week in Review – October 12, 2012

By

Managing Director, KippsDeSanto & Co.

Posted on October 15th, 2012

Posted under: Industry Review, Mergers & Acquisitions

Over the past week, the “deal of the decade” between BAE Systems and EADS broke down under political objections between the UK, French, and German governments.  Notably, the UK wanted its counterparts to agree to limit their influence in the merged firm in order to maintain BAE’s strong working relations with the US Pentagon.  Diplomats also believe German chancellor Angela Merkel was unwilling to compromise on certain positions against the structure of the deal.  BAE and EADS had agreed to a unified management and board structure and had identified cost and revenue synergies by the time the deal was cancelled.  Ian King, BAE chief executive, said “We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders.”

Carl Icahn has made a tender offer to acquire Oshkosh, a maker of armored trucks, for $32.50 per share in cash valuing the business at $3.4 billion.  Icahn is the largest shareholder of the company with a 9.5% stake and recently gained a seat on the board at Navistar, a struggling truck manufacturer.  Icahn has previously suggested the two companies could merge, however he has since rejected the idea.

Big Movers

Oshkosh Corporation (Up 5.8%) – Shares are up this week following Carl Icahn’s tender offer to acquire the company.  The company’s shares have advanced 40% this year.

ESCO Technologies (Down 8.9%) – Shares were down this week following an announcement that the company will close its Chicago manufacturing facility as it consolidates its test segment’s four domestic facilities into three.  The plant’s closing is expected to be completed by January of next year and result in “less than 50” employees losing their jobs.

Relevant Transactions

No relevant transactions for the week

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