Agrium (AGR) has announced a $72.00 per share offer for CF Industries (CF), valuing the company at $3.6b.

This action by AGR is very clearly an attempt to prevent the possible Terra Industries (TRA) - CF combination which would threaten AGR's top position in most major fertilizer segments. From that standpoint, AGR's offer make perfectly good sense as any situation that disrupts TRA/CF would benefit AGR in the long run.

The backlash to the Ticketmaster (TKTM) / Live Nation (LYV) transaction has far exceeded this publication's expectation. As of this entry, the Department of Justice has responded to the extremely high volume of political and public concerns by announcing that it has already launched an investigation into the proposed combination. This is obviously a very ominous sign for the regulatory future of the deal, particularly under a new and highly motivated DOJ leadership.

This is quite clearly a case where the companies' decision to move forward with this merger is highly questionable. This deal provides an ideal case for the DOJ to quickly establish it authority, while at the same time distinguishing itself from the previous DOJ's relatively lax enforcement. This concept if very likely the primary reason why the deal is coming under such tremendous criticism that will very likely continue for the next several months.

This is developing into a situation where the more the Pfizer (PFE) - Wyeth (WYE) merger is researched in depth, the more it looks as if the combination is virtually clear of any legitimate antitrust concerns.

Critical research and analysis of major transactions such as this tends to be relatively cautious where regulatory matters and timing are concerned. The fact is that major (and often minor) pharmaceutical/biotech mergers are vulnerable to at least some delay, if only for the "educational" aspects frequently employed by regulators when complex products and/or markets are involved.

Wyeth's (WYE) "Enbrel" product (Tumor Necrosis Factor Inhibitor) can be said to compete with Pfizer's (PFE) controversial Celebrex ((NSAID)) in the broad, and highly competitive, arthritis treatment drug segment. The critical aspect here is that the TNF Inhibitor niche has been generally considered by regulators as a distinct treatment approach and alternative to NSAID's and other common pain relief options.

This FTC complaint in the IMNX-AMGN merger.-- which resulted in WYE obtaining rights to Enbrel -- notes that at the time of the [[IMNX]]-[[AMGN]] deal (c. 2002) the TNF Inhibitor market was limited to three players. Although the markets have changed in terms of products and effectiveness, there are still essentially three primary players in the arthritis-biologics field: Enbrel, Remicade (JNJ), and Humira (ABT).

Embarq Corporation (EQ) and CenturyTel (CTL) filed their response to comments/opposition on January 23, 2009.

Along with the companies' filing, several intervenors also filed initial or follow-up reply comments on the 1/23 deadline. Intervenors in the review now include: Accelerated Data Works, DeltaCom, Sprint Nextel (S), Communications Workers of America, National Association of State Utility Consumer Advocates, Independent Telephone and Telecommunications Alliance, New Jersey Division of Rate Counsel, NuVox and Socket Telecom, and Comptel. It must be noted that all third-parties in the FCC review are in opposition to the merger and/or are petitioning the FCC to impose various conditions on the the merger.

The first and most glaring product overlap associated with the Pfizer (PFE) - Wyeth (WYE) deal involves WYE's "Effexor" and PFE's "Zoloft" antidepressant drugs. These are two of the top antidepressants on the market and among the most highly marketed and internationally recognized products in this segment.

As the chart below from 2006 illustrates, Effexor and Zoloft each have close to 20% of this lucrative market, so the combined entity would have close to 40% of the overall market. Granted, this data is almost four years old, but it is believed to closely reflect the current market conditions for this particular product niche.

The Aladdin Knowledge Systems (ALDN)/Vector Capital deal continues to pose one of the more frustrating research and analytical projects in recent memory. While there appears to be a very mild sense within the industry and among some analysts that this transaction may be problematic from a competition standpoint, there does not appear to be a single source for decent market share data for the relevant U.S. or European markets. Furthermore, despite numerous attempts to contact competitors and industry analysts, no source seems willing, or able, to provide an assessment that we consider useful in projecting this deal's regulatory timing.

Therefore, it can only be stated yet again that the evidence available to this point clearly shows a direct overlap and exceedingly high combined market share (the specific market share remains a mystery) in the Software DRM niche, both in the United States and various European markets. Until this publication is able to obtain information from a reliable source that this proposed combination is insignificant in terms of competition, it must be assumed that the FTC/DOJ and the European Commission will conduct lengthy reviews.

As of this entry, Terra Industries (TRA) has not issued a response to CF Industries' (CF) unsolicited offer, nor has it given any indication as to when it intends to respond. Presumably, TRA will announce a decision on the offer before the company's scheduled Q4 earnings report on February 10.

It will again be stated that the current offer is perceived as adequate under the current circumstances and as such TRA is not expected to summarily reject the offer or in any way create a hostile situation. If TRA does not accept the offer, it is generally anticipated that it will leave open the possibility of open negotiations with respect to a formal agreement.

As of this entry, the FTC has still not granted consent to Datascope Corp. (DSCP) divestiture agreement announced in late November of last year.

Despite the fact that some regulatory interest was anticipated in this deal, the current delay is highly unusual, and somewhat perplexing, as concessions such as those offered by DSCP are routinely accepted without much delay by the current FTC. While it can be speculated that the holiday period may be partially to blame for the continued HSR review, it seems that more than six weeks would be ample time for the FTC to fully assess the impact of the divestiture agreement. Obviously, this has not occurred.

The Indevus Pharmaceuticals (IDEV) - Endo Pharmaceuticals (END) merger appears to be an extremely clean combination from a competition standpoint, as ENDP is engaged almost exclusively in non-generic pain management products (Lidoderm being the company's primary product), while IDEV focuses on areas such as overactive bladder ((OAB)), hypogonadism, prostate cancer, and other various urinary tract problems. Based on research to this point, there are absolutely no overlapping products associated with the proposed transaction.

Possible delaying factors exist with non-U.S. regulators, as IDEV actively markets and sells many of its products in Germany, Ireland, Italy, Spain and the United Kingdom, among other countries. It will be noted that in recent months, regulators in these jurisdictions have been extremely accommodating in clearing merger cases quickly in tender offer transaction such as this. Therefore, any delays will be minimal for this deal.

With respect to Exelon's (EXC) recent campaign aimed at obtaining NRG Energy (NRG) support, there does not appear to be any indication that NRG and/or Warren Buffett have much enthusiasm for the current $26.43 offer. In other words, it is not expected that EXC's efforts will have much of an impact in convincing NRG to accept the offer at this time, with or without the threat of a hostile takeover attempt. Threatening an individual such as Warren Buffett is somewhat comical and in the end will proved to be an act of futility.

Added to this is the fact that any NRG/EXC combination, hostile or otherwise, will take in upwards of 12 months to complete due to the various regulatory obstacles. There truly is no logic in going hostile in a situation where extremely lengthy regulatory processes can easily create variables which would allow NRG to avoid this deal. As an example, if the overall market conditions improve over the next several months, NRG could simply become an acquiror again, as it was so recently in the CPN scenario.

The FTC has issued a second request under HSR for the Datascope (DSCP) - Getinge transaction. A DSCP press release states the following:

Getinge and Datascope remain committed to working cooperatively with the FTC as it conducts its review of the proposed acquisition and remain confident of a successful close to the transaction.

[[CLF]] yesterday announced that it will postpone its shareholder meeting for this transaction from November 21 to December 19, 2008, stating the following:

Cliffs said it rescheduled the meeting to allow shareholders adequate time to consider new information on the financial benefits of the pending transaction. In conjunction with this, Cliffs has also rescheduled the record date for the special meeting as of the close of business on Nov. 19, 2008.

This entry will acknowledge Ashland's (ASH) comments Tuesday regarding the status of its merger with Hercules (HPC):

We have received all necessary regulatory approvals and continue to work with our banks on the structure and terms of the committed financing. The next milestone is the Hercules shareholder vote on the transaction at their Nov. 5 special meeting.

Rohm Haas Co. (ROH) shareholders have approved its merger with Dow Chemical Co. (DOW).

The companies continue to project a close in early 2009.

Cleveland-Cliffs Inc (CLF) shareholders rejected Harbinger Capital's control share acquisition on October 3, 2008. A CLF press releases states the following:

[B]ased on the preliminary count provided by its proxy solicitor, it appears that approximately 80% of shares voted by holders other than Harbinger Capital Partners, its equity-swap counter parties or other 'interested' shareholders voted AGAINST the proposed control share acquisition at today's special meeting.

In the case of Wachovia (WB) - Wells Fargo (WFC), it seem far more prudent, if not an absolutely necessity, to assess the Citigroup (C) / FDIC aspect, rather than focus on the dynamics of the WB-WFC transaction. First and foremost, it must be pointed out that this publication has no point of reference for this particular type of scenario (or anything resembling this scenario), despite the banking database being the largest in our database. This situations is, to put it mildly, unchartered waters.

That being said, the bottom line is that Wachovia will be acquired one way or the other and none of the current legal wrangling and potential federal regulatory issues will in any way stop and/or delay this outcome. Although it is nearly impossible to foresee the precise outcome of Citi's legal claims and the subsequent negotiations in progress between the involved parties and the FDIC, the initial impression is that a mutually satisfactory agreement will be reached in fairly short order. Whether this involves dividing WB's regional branches between WFC and Citi (as has been widely speculated) or compensating Citi via other means, expediting WB's fate is clearly in the best interests of the company's shareholders, its costumers and, perhaps more importantly, the federal government.

Alpharma (ALO) has announced the rejection of King Pharmaceuticals' (KG) unsolicited $37 per share offer as "financially inadequate."

ALO has also disclosed the following with respect to third-party interest:

The Datascope Corp. (DSCP) - Getinge AB combination may present some fairly complex issues in the area of vascular/cardiac devices as a result of Getinge acquiring Boston Scientific's (BSX) cardiac surgery and vascular division last year.

At present, the devices offered appear to be largely vertical in their surgical applications, but this has often been somewhat difficult for regulators to examine within the medical device/equipment segment. In a cash tender offer time frame, this type of complexity is naturally accentuated with respect to regulatory reviews.

Despite the late entrance in covering this DRS Technologies (DRS) transaction it has quickly become one of the more difficult to assess, particularly with respect to the Exon-Florio review, in recent memory.

On the positive side, the CFIUS has shown little resistance to deals involving military products/services, regardless of the national security implications, real or perceived. A large part of this must be attributed to the fact that the more significant non-U.S. acquisitions have involved the change of ownership to companies domiciled in "friendly" countries, as was the case in the Armor / BAE Systems deal last year.