1. United Unites with Continental
The airline industry consolidated yet again in 2010. In a May, United and Continental announced a $3.2 billion hook-up to create the world's largest airline. When the integration is completed, the company will serve 378 airports with hubs in 10 cities. It will have 5,811 daily departures and an estimated 144 million passengers a year. The combination could also produce more than $30 billion in revenue a year, or nearly 50% more than its nearest competitor American Airlines. Despite the merged company's size, the deal flew through the approval process — such is the state of this beleaguered industry. The biggest point of contention seems to be about the logo. In late 2011 or 2012, the combined company will go by United but use Continental's golden globe as its logo. A campaign to save United's "tulip" has so far been unsuccessful.
2. General Motors' IPO
GM's initial public offering is set to raise as much as $23.1 billion making it the biggest IPO ever and giving Washington the opportunity to call its bailout of "Government Motors" a success. The shares, which were priced originally around $27.50 each, eventually sold for $33. The interest in the deal partly driven by GM's rebounding fortunes. The company earned $5 billion in the first nine months of the year. If it ends up in the black in 2010, which looks likely, it will be the car company's first annual profit since 2004. Uncle Sam poured nearly $50 billion in GM at the height of the recession to save the car company from liquidation. GM's shares still have to rise to nearly $49, or another 47%, for the government to break even. The IPO, though, puts GM one step closer to getting Washington out of its finances.
2. General Motors' IPO
GM's initial public offering is set to raise as much as $23.1 billion making it the biggest IPO ever and giving Washington the opportunity to call its bailout of "Government Motors" a success. The shares, which were priced originally around $27.50 each, eventually sold for $33. The interest in the deal partly driven by GM's rebounding fortunes. The company earned $5 billion in the first nine months of the year. If it ends up in the black in 2010, which looks likely, it will be the car company's first annual profit since 2004. Uncle Sam poured nearly $50 billion in GM at the height of the recession to save the car company from liquidation. GM's shares still have to rise to nearly $49, or another 47%, for the government to break even. The IPO, though, puts GM one step closer to getting Washington out of its finances.
4. MetLife Picks Up a Piece of AIG
Last year, MetLife's combative former CEO Robert Benmosche took on the job of trying to turn around AIG, and pay back the $130 billion in assistance the insurer got from the U.S. government at the height of the financial crisis. This year he struck a number of deals that gets him a lot closer. One was to sell AIG's international life insurance company Alico to his former employer. The deal generated $16 billion for AIG, of which nearly $7 billion was in cash. The rest was in MetLife stock. All told, AIG now has nearly $40 billion in cash, and AIG's stock increased nearly 40% in the first ten months of the year. Benmosche may not be able to stay to complete his turnaround, though. In October the executive announced he was being treated for cancer.
5. Agriculture Bank of China Goes Public
Last summer's Agricultural Bank of China initial public offering briefly created something that was unthinkable a decade ago: Communist China had produced Wall Street's largest IPO ever. (The GM IPO later topped it.) The deal raised $22 billion, and valued the financial institution at nearly $100 billion, making it among the most valuable banks in the world. Ag Bank's IPO was another symbol of China's prosperity. Ag Bank isn't even China's largest financial institution by market capitalization. It ranks third. Xiang Junbo, an award-winning scriptwriter and war hero, heads the bank. Ag Bank has 24,000 branches, 441,000 employees and 320 million customers — more than the population of the U.S.
6. Unilever Buys Alberto Culver
It was a deal with a lot of lather in it. Unilever's $3.7 billion acquisition of Alberto Culver in September bought together the producer of Dove and Pond's with the maker of haircare products TRESumme and VO5. Consumer staples do relatively well in weak economies. So it makes sense the Dutch conglomerate would want to expand in an area like shampoos, which for most is a must have household item, even during a recession.
7. Warren Buffett Acquires a Successor
The hiring of an investment manager isn't normally big news. But when a 39-year-old hedge fund manager gets picked to eventually replace 80-year-old legend Warren Buffett it makes international headlines. Todd Combs will leave his job at hedge fund Castle Point Capital Management in Greenwich, Conn., at the end of 2010 to join Buffett's Berkshire Hathaway. Buffett is currently the chief executive and top investment officer at his insurance and investment firm. But Berkshire is expected to split Buffett's job in two when he retires. Three years ago, Buffett said the company had a number of good choices to succeed him as CEO, but still needed to hire someone who could take over his money management role. Buffett helped set up Combs at Castle Point five years ago by finding him seed money from a private equity firm. Comb's main fund is up 34% in the past five years, well better than the Standard & Poors 500 during the same time, which has fallen more than 5%. But Buffett may have picked Combs because of what he hasn't invested in. Comb's fund specializes in financial services companies. Yet he has managed to avoid most of the long list of blow-ups of the past three years including AIG, Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers or Washington Mutual. 'Don't lose money' is one of Buffett's classic investment rules
8. Private Equity Firm 3G Buys Burger King
The fast food business got a whopper of a deal in 2010. In late summer, Brazilian private equity firm 3G paid $3.3 billion to acquire the fast food staple Burger King. In part, the acquisition is another sign that the burger business is sizzling. Such upstart chains as Five Guys and Fatburger are expanding rapidly. Even some high-end chefs and restaurateurs are opening burger joints. What's more, Burger King was the second big burger deal of the year. In February, private equity firm Apollo paid nearly $700 million for CKE Restaurants, which owns BK rivals Carl's Jr. and Hardee's. Despite the hunger for burgers, BK has struggled, reporting declining sales for more than a year. A few years ago, BK's management decided to refocus the chain on its loyal 18-to-34 year-old customers. But that age group has had among the highest rates of job loss during the recession. BK's new owners say they will get growth outside the U.S. Burger King still generates two-thirds of its revenue from the U.S. and Canada. The more diversified McDonald's generates just 35% of its sales in the U.S.
Read more: http://www.time.com/time/specials/packages/article/0,28804,2035319_2035005_2035025,00.html #ixzz19xeWL2j6
9. Southwest Buys Airtran
There was more than one sky hook-up in 2010. In a surprise deal, Southwest, the nation's largest low-cost carrier, acquired its smaller rival AirTran for $1.4 billion. The deal expands Southwest's geographic reach. Most of AirTran's routes are in the Northeast, where Southwest is unsurprisingly weak. But it was also a reaction to other recent airline combinations, including the United and Continental combination, and Delta's purchase of Northwest in 2009. Southwest felt it needed to add scale to stay competitive. The need to reduce seat capacity is behind the big deals. For years the industry has had too many planes chasing too few passengers, killing profits. That's changing. For consumers, though, the result will be higher average ticket prices.
10. IBM Sells 1% Bonds
For corporations looking to borrow, the poor economy and a Federal Reserve policy of keeping rates as low as possible has been a big boon. That fact was solidified this summer when IBM raised $1.5 billion dollars selling bonds bearing an interest rate of just 1%. Since then a number of other large companies have sold bonds at similarly low rates. But at the time, the IBM bonds had the lowest interest rate of the more than 3,400 securities in the Barclay's Capital U.S. Corporate Index. Two years ago, it seemed all U.S. debt was toxic. Investors were demanding high rates for even the safest of debt offerings. The IBM deal is just another important sign that the economy is slowly improving.
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