When it comes to negotiating multibillion-dollar deals, Wall Street can get as covert and secretive as the CIA. Or at least it tries to, though often news of merger talks between companies leaks out before the deal is signed. Media outlets compete fiercely for merger scoops because they are sexy, make for nice headlines, and are in abundant supply since companies are always "talking" to each other and "exploring opportunities."
Deal negotiations also require making a lot of people privy to highly sensitive information. Bankers, lawyers, company boards and executives, communications folks, and more are all involved.
To lessen the chances of a leak, deal negotiations are often assigned code names. As with covert military operations, the idea is to keep the circle of trust tight and limit the risk of having their cover blown. Some code names slyly hint at the companies involved, others have nothing to do with them at all. But as the deal economy has grown, code names have become an integral part of the Wall Street culture.
Below are the code names used for seven major deals spanning from 2006 to this year. Test your knowledge with our merger code name challenge.
(**all code names and their reason for being used were supplied by sources who were involved in the negotiations but asked not to be named or gleaned from publicly available information.**)
AOL/Time WarnerSears/KmartInterContinentalExchange/NYSE Euronext
Announced in December of last year, this $8.2 billion deal bringing together two of the world's largest exchanges by value of listings went by the code name "Project Yankees/Braves." The deal brings together ICE's energy and commodities trading business with NYSE Euronext's financial futures business to create a combined company valued at $20 billion.
Liberty Global/Virgin MediaShuanghui/Smithfield FoodsSanofi-Aventis/Genzyme Corp
Liberty Media/Virgin Mobile
Already the largest pay-TV distributor in Europe, this roughly $16 billion deal, struck in February, gives U.S. cable pioneer John Malone a foothold in the London cable market. "Project Viper," as the deal was called, also puts Malone in head-to-head competition with Rupert Murdoch, whose News Corp owns a controlling stake in the UK's largest pay-TV operator BSkyB.
MGM Grand/Mirage ResortsTerra Firma/EMIYahoo/Tumblr
Arguably one of the worst entertainment deals of all-time, buyout shop Terra Firma bought record label EMI for a stunning $6.8 billion in 2007, in the midst of the music industry's epic collapse and on the cusp of a global recession. So bad was the deal that Terra Firma is still battling in court to recoup its money. Indeed, when the code name "Project Dice" was revealed in a 2010 trial about the deal it was thought to have been used to connote the riskiness of the purchase. Alas, that wasn't the case. The code name was picked as a sly tribute to the song "Tumbling Dice" by then-EMI artists The Rolling Stones.
Kraft Foods/CadburyBerkshire Hathaway-3G Capital/HJ Heinz CoConAgra Foods/Ralcorp Holdings
The $21.8 billion deal between U.S. food giant Kraft and legendary London chocolate maker Cadbury went by the code name "Project Eagle." Announced in January 2010, it combined Kraft's Philadelphia Cream Cheese and Oreo cookies with Cadbury's well-known chocolate bars.
Hewlett-Packard/CompaqSilverlake Partners-Michael Dell/DellFacebook/Instagram
Silverlake Partners-Michael Dell/Dell
"Project Denali" seems like an appropriate code name for this deal since it has been one long slog since it was announced in February. The roughly $24 billion take-private deal has been bitterly opposed by investors such as Carl Icahn. But Dell's board supports the offer and is recommending shareholders vote to approve it at a meeting scheduled for July.
Bank of New York/MellonWells Fargo/Wachovia CorpBank of America/Merrill Lynch
Bank of New York/Mellon
Dubbed "Project Cider," the $16.5 billion merger of these two banks was struck in 2006, smack dab in the middle of a wave of bank mergers that began in 2004 and ended with the "too big to fail" deals that saved the financial industry from collapse in 2008.
Sirius Satellite Radio/XM Satellite RadioAMR Corp/US Airways CorpInternational Paper/Temple-Inland
Valued at $4.5 billion, the February 2012 deal between these two paper and packaging companies was given the code name "Project Metal" by bankers because the stock ticker symbol for Temple-Inland was "TIN."
Deal Code Name Challenge
7 out of 7: You are an M&A banker, lawyer, or corporate executive.
5-6 out of 7: You are an extremely well-sourced M&A generalist reporter.
3-4 out of 7: You are an investor who follows business news closely.
1-2 out of 7: You sometimes watch Andrew Ross Sorkin and David Faber on CNBC.
0 out of 7: C'mon, even if you were totally guessing odds are you got at least one right.