As the temperatures rise across the U.S., especially in New York on Monday, so did the number of deals. British insurance broker Willis Group Holdings Ltd. made an acquisition in the U.S. while Honeywell International Inc. and Lehman Brothers Inc. increased their capital. The deals helped the Dow rally 106.74, or 0.89%, to 12,318.67 while the Nasdaq backpedaled 16.69, or 0.67%, to 2,460.01.
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Willis Group [WSH] purchased competitor Hilb Rogal & Hobs Co., which is the eighth-largest insurance and risk management intermediary in the U.S., for $2.1 billion. Shares of Hilb Rogal skyrocketed $13.31, or 43.09%, to $44.20, while Willis fell 86 cents, or 2.40%, to $35.02. The deal calls for Willis to buy HRH for $46 per share, or $1.7 billion in total, split equally between cash and stock. The Deal's Jonathan Braude says the merger "is set to double
Willis' North American revenue and strengthen its position in growth markets. It is expected to lift cash earnings per share from close and bolster GAAP earnings per share from year two."
Meanwhile, Lehman Brothers [LEH] stepped forward with a much-anticipated move to raise additional capital. The New York-based investment bank plans to raise $6 billion in equity in a public offering. Lehman said it will sell $4
billion of common stock and $2 billion of convertible preferreds that
pay an interest rate of 8.75%. The announcement comes the same day the investment bank announced that it had lost $2.8 billion in the first quarter. Investors stayed away from Lehman, as it fell $2.93, or 9.07%, to $29.30.
Lastly, diversified technology and manufacturing company Honeywell [HON] announced it would sell its Consumable Solutions to B/E Aerospace Inc. for $1.05 billion. Shares of Honeywell jumped $1.09, or 2.02%, to $55.01. The sale will add to Honeywell's coffers as the company has been on an aggressive M&A tear lately. In the last couple of months, Honeywell picked up Norcross Safety Products LLC from Odyssey Investment Partners LLC for about $1.2 billion in cash and barcode equipment maker Metrologic Holdings Corp. from private equity firm Francisco Partners for $720 million in cash. - Gerald Magpily
