Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

A Standout Year For Deals, In Volume And Complexity

Recommended Posts

http://www.nytimes.com/2016/01/04/business/dealbook/a-standout-year-for-deals-in-volume-and-complexity.html?ref=business&_r=0

Of all the ways to describe mergers and acquisitions in 2015, “plain vanilla” is not one of them.

Last year was one for the record books, generating $4.7 trillion in announced deals, with the highest percentage ever derived from those valued at more than $5 billion, according to data compiled by Thomson Reuters.

Unlike boom years past, however, this one was characterized by dozens of complex and creative financial structures. Drug makers Pfizer and Allergan sought to combine effectively through a tax-inversion deal, lowering Pfizer’s tax rate. Dow Chemicals and DuPont, two storied chemical giants, agreed to merge into a $130 billion behemoth with the explicit intent to be separated into three companies in a few years.

Other deals, such as Anheuser-Busch InBev’s $104 billion acquisition of rival brewer SAB Miller required multiple divestitures before any chance of regulatory approval. Rare financial instruments such as tracking stocks and contingent value rights, both creative ways for adding value for the seller, also appeared in takeovers.

Boardrooms were flooded with so much confidence that executives were willing to stretch beyond the textbook-style acquisition — Company A buys Company B — to get deals done. Financing was cheap because of low interest rates and growth was generally slow, so colossal companies sought purchases as a way to expand.

This I suspect can only end well.... short termism at it's best?

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   26 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.