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M&A wrap: Coronavirus, BorgWarner, Delphi, BabyQuip, 5Capital, Hampleton Partners, Alvarez & Marsal, Riverside, M33 Growth, Paul Hastings

BorgWarner Inc. (NYSE: BWA) may back away from its $1.5 billion deal for Delphi Technologies Plc after the latter auto parts supplier tapped out its credit line without receiving permission from its acquirer. Delphi drew down its full $500 million revolving credit facility to position for the downturn related to the coronavirus …

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Delphi draws down credit facility, gets warning from BorgWarner about pending deal

BorgWarner Inc. may back away from its $1.5 billion deal for Delphi Technologies Plc after the latter auto-parts supplier tapped out its credit line without receiving permission from its acquirer.Delphi drew down its full $500 million revolving credit facility to position for the downturn related to the coronavirus pandemic, the Gillingham, …

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Jaguar owner to spin off cars unit, as auto sales in India drop due to the coronavirus

Tata Motors Ltd., the Indian owner of Jaguar Land Rover, plans to separate its cars business from trucks and buses, as the company seeks partners for a unit slammed by the coronavirus outbreak and a global shift to electric vehicles.Car sales in India fell for a 16th consecutive month …

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‘Abstract, Unclear or Baseless:’ Japan Strikes Back After Ex-Nissan Boss Ghosn Slams Justice System

‘Abstract, Unclear or Baseless:’ Japan Strikes Back After Ex-Nissan Boss Ghosn Slams Justice System | Fortune

Source: Leadership – Fortune

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M&A wrap: Amazon, KKR, Thompson Street, Bridgepoint, William Blair, Most Influential Women Inc.’s (Nasdaq: AMZN) record breaking holiday season underscores the role technology is playing in retail these days. The online giant says it shipped billions of items and sold tens of millions of Amazon devices, including the Echo Dot. Read the full story by Bloomberg News: Amazon’s holiday shopping broke records in 2019. The retail industry is undergoing transformational changes. Mergers & Acquisitions examines the impact of 7 technologies on M&A in the retail sector. Read our full coverage: Retail Tech M&A: 7 Technologies Driving Change.

Mergers & Acquisitions has named the 2020 Most Influential Women in Mid-Market M&A. This marks the fifth year we have produced the list, which recognizes female leaders with significant influence inside their companies and in the wider dealmaking world. It’s been gratifying to watch the project evolve over the years – and become more influential itself. This year, we received more nominations than ever before. As a result, we expanded the number honored to 42 in 2020, up from 36 in 2019. The project includes many dealmakers who are new to our list, including: William Blair’s Shay Brokemond; Rockwood Equity’s Kate Faust; and Avante’s Ivelisse Simon. Read our full coverage of all the champions of change on our list, including Q&As with each individual.

KKR & Co. (NYSE: KKR) is buying digital content company Overdrive. The latter offers ebooks and audiobooks to schools and libraries. Goldman Sachs, LionTree Advisors and Simpson Thacher are advising KKR.

Advance Auto Parts Inc. (NYSE: AAP) has acquired the DieHard automotive battery brand from Transform Holdco LLC for $200 million. “DieHard stands for durability and reliability and we will strengthen and leverage the brand in other battery categories, such as marine and recreational vehicles,” says Advance Auto CEO Tom Greco.

Thompson Street Capital Partners is buying Custom Wheel House LLC, a maker of automotive aftermarket wheels and performance tires. The target owns the Method Race Wheels, Tensor Tires and GMZ Race Products brands.

Mergers & Acquisitions examines the impact of 7 technologies on M&A in the retail sector. Read the whole series:

Overview: Retail Tech M&A: 7 Technologies Driving Change
Retail Tech M&A #1: Nike, McDonald’s, PayPal, add customization, IoT
Retail Tech M&A #2: Why Walmart and other retailers are buying artificial intelligence startups
Retail Tech M&A #3: Amazon leads race to build fulfillment centers
Retail Tech M&A #4: Do robots fill orders faster?
Retail Tech M&A #5: Voice recognition gives retailers more ways to communicate
Retail Tech M&A #6: Data improves customer service
Retail Tech M&A #7: Demand for convenience drives growth in mobile ordering

Albertsons, Kroger Co. (NYSE: KR), Stop & Shop and Walmart (NYSE: WMT) are building automated mini-warehouses and “dark stores” to make deliveries and prepare pickup orders. Mini-warehouses are usually attached to existing stores, and in most cases, “dark stores” are completely separate. Both formats are closed off to customers, and are mostly automated. They use the assistance of robots for speed, save on labor, and get orders out faster. Kroger bought a five percent stake in robotics firm Ocado. Read our full coverage: Smart supermarkets become popular, as Kroger, Walmart add them.

It’s a milestone year for the Blackstone Group Inc. (NYSE: BX), which transitioned from a publicly traded partnership to a corporation on July 1. The New York firm announced the final close of its latest global real estate fund recently. With $20.5 billion of total capital commitments, Blackstone Real Estate Partners IX is the largest real estate fund ever raised. Mergers & Acquisitions spoke with Stephen A. Schwarzman, the firm’s co-founder, chairman and CEO. Read the full story: “Complete control” is the beauty of private equity, says Blackstone’s Stephen A. Schwarzman.

The private equity model has held up very well over the decades, continuing to outperform the public markets, even as economic cycles come and go. But the rate of growth has slowed, leading PE firms to seek adjacent areas of business to expand. As PE firms face increased pressure to produce higher returns on their investments, many of them are turning to a familiar area of business: lending. Adams Street Partners, Balance Point Capital, Carlyle and VSS are all actively engaged in lending. Read the full story: Private equity firms are becoming lenders. Here’s why.

To celebrate deals, dealmakers and dealmaking firms, Mergers & Acquisitions produces three special reports every year: the M&A Mid-Market Awards; the Rising Stars of Private Equity; and the Most Influential Women in Mid-Market M&A. For more on the timeline and nomination process for each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.

During the holiday season, Mergers & Acquisitions is covering the philanthropic and volunteer initiatives underway in the private equity industry. At Mergers & Acquisitions, we’re covering the philanthropic and volunteer initiatives underway in the private equity industry. Last year, we published The Big Give, an in-depth look at how private equity firms are contributing. Efforts have continued to flourish, fueled by younger Millennials seeking to build a better future and by mature partners considering the legacy they will leave behind. Read our full coverage: Private equity gives back: Vista’s Robert F. Smith, Clearlake’s José E. Feliciano, Riverside employees.

The Annual AM&AA Winter Conference is taking place in Scottsdale, Arizona Jan. 8-10.

Deal Wave is being hosted by ACG Orange Country at the Ritz-Carlton-Laguna Niguel in Dana Point, California on Jan. 9.

ACG New York is hosting the 12th annual healthcare conference and bourbon tasting at the Metropolitan Club in New York on Feb. 27.

Source: The Latest

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Fiat Chrysler and Peugeot merge to create world’s fourth-biggest automaker


Photo credit: Bloomberg News

PSA Group and Fiat Chrysler Automobiles NV agreed to combine to create the world’s fourth-biggest carmaker, as the manufacturers prepare to shoulder the costly investments in new technologies transforming the industry.

In the biggest auto tie-up since Daimler’s ill-fated purchase of Chrysler in 1998, the French and Italo-American carmakers will each own half of the enlarged business. The new company, with global sales of 8.7 million vehicles, will be run by PSA Chief Executive Officer Carlos Tavares, with Fiat Chairman John Elkann holding the same role.

The all-stock transaction would forge a regional powerhouse to rival Germany’s Volkswagen AG and with a market value of about $47 billion, surpassing Ford Motor Co. The deal also brings together two carmaking dynasties — the billionaire Agnelli clan of Italy, led by Elkann, and the Peugeots of France.

The transaction will take as long as 15 months to complete, pending approvals by shareholders of both companies and by regulators, the carmakers estimated.

Like executives across the industry, Tavares and Elkann are responding to growing pressure to pool resources for product development, manufacturing and purchasing in the face of trade wars and an expensive shift toward electric and self-driving technology.

“The challenges of our industry are really, really significant,” Tavares, 61, told reporters on a call. “The green deal, autonomous vehicles, connectivity and all those topics need significant resources, strengths, skills and expertise.”

“The technological revolution we are embracing requires a more innovative response than anything we have done before,” Elkann, 43, said in a letter to staff.

In an era when size is becoming ever more important, the deal will turn the two mid-sized carmakers into a global heavyweight, with a stable of popular brands and annual vehicle sales surpassing General Motors Co. The combination will give Peugeot-maker PSA a long-sought presence in North America and should help Fiat gain ground in developing low-emission technology, where it’s lagged rivals.

Yet the new company will still be heavily reliant on Europe’s sluggish and saturated auto market, and poorly positioned in China, the world’s largest country for car sales.

The companies are aiming to extract 3.7 billion euros in annual synergies from the deal, without closing any plants, unchanged from the target they announced when they disclosed their merger discussions.

The challenges will be manifold, from improving Fiat’s struggling European operations to meeting tough rules on emissions that kick in next year in the region as well as an unprecedented policy known as the green deal demanding an even tougher clampdown on carbon. Tavares, known as a hard-nosed cost-cutter, will also have to navigate the political crosscurrents in France, Italy and the U.S., where the automakers have deep national roots.

He has tackled tough jobs before, leading the French carmaker back from the brink after taking over in 2014, and reviving the loss-making Opel brand after acquiring it from GM two years ago.

“We believe further synergies above the modest 3.7 billion euros announced will be required to justify the combination going forward, which Tavares’ track record makes likely,” Bloomberg Intelligence analyst Michael Dean said in a note.

The deal with Fiat Chrysler marks a reversal of fortune for the executive, who was forced into a bystander role earlier this year when Elkann approached Renault SA, PSA’s French rival. That merger fell apart in early June after Renault’s Japanese partner, Nissan Motor Co., declined to back it.

China’s Dongfeng Motor Corp., which owns 12% of PSA, will see its stake in the combined company decline to 4.5% as a result of the deal and the sale of a portion of its holding to the French carmaker.

Dongfeng’s stake in PSA has attracted attention because of the possibility it could interfere with U.S. regulatory approval. U.S. economic adviser Larry Kudlow said last month the Trump administration would review the proposed merger because the deal would give the Chinese carmaker a stake in the combined company.

Tavares, on the call, said the companies don’t expect any significant issues from the antitrust regulators.

Fiat CEO Mike Manley dismissed concerns over legal and tax issues that arose in recent weeks. GM in November accused Fiat Chrysler of bribing a union in the U.S. for more favorable terms. Manley, speaking with reporters, called the allegation meritless.

Separately, Italian tax authorities have claimed that Fiat owes the government a hefty sum after underestimating Chrysler’s value following its purchase several years ago. Manley reiterated that the case would have no material impact, and said both issues were reviewed during due diligence with PSA.

Manley, 55, who took over at Fiat last year after the sudden death of industry legend Sergio Marchionne, “will be there alongside” Tavares at the combined group, Elkann said in a letter to employees. He didn’t specify what Manley’s role would be.

Before the closing, Fiat will distribute to its shareholders a special dividend of 5.5 billion euros while PSA will distribute its 46% stake in car-parts maker Faurecia SE to its own investors.

The spinoff or sale of Fiat’s robotics arm Comau slated for the benefit of the Italian company’s shareholders has been modified since October. Now, the planned separation will occur after the closing, and shareholders of the combined company will benefit.

Goldman Sachs acted as lead financial adviser to Fiat Chrysler, while Bank of America, Barclays, Citigroup, d’Angelin & Co., JPMorgan and UBS also provided financial advice to the company. Sullivan & Cromwell LLP, De Brauw Blackstone Westbroek and Darrois Villey Maillot Brochier acted as legal counsel to the Italo-American carmaker.

Mediobanca’s Messier Maris & Associés acted as lead financial adviser to PSA, while Morgan Stanley also provided financial advice. Bredin Prat served as legal counsel to the French manufacturer.

Exor, the Agnelli family holding company which controls Fiat, was advised by Lazard.

Source: The Latest

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Gina Cocking of Colonnade Advisors named to 2020 Most Influential Women in Mid-Market M&A


Photo credit: Colonnade Advisors

Describe a recent accomplishment.
I was the lead on advising Protect My Car, a founder-led company, on its sale to Crestview Capital. This is the type of deal that is in the sweet spot for Colonnade. We often work with founders of established entities on a majority sale. We focus on financial and business services, and one of our deep knowledge verticals is auto finance and insurance. We brought transaction expertise in the financials and operations in a complicated industry, extensive investor relationships, and one of the most informed views on valuation. Our focus and expertise resulted in a successful transaction.

What’s new?
We have become more efficient and effective through our investments in technology and process improvements.

How are you advancing the state of women?
I am very proud that half of the Colonnade Advisors’ team is female. This is by design. Industry-wide, an estimated one in four analyst positions and only 17 percent of senior leadership roles are filled by women, according to Catalyst. We start engaging with women while they are still in college to give them more transparency into the industry. To date, over half of our interns have been female.

Source: The Latest