Tag Archives: money
Mergers and acquisitions: Waiting for a wave
Posted on 26. Aug, 2010 by admin.
FIRMS with interim bosses usually opt for the quiet life, but the lack of a permanent boss did not stop Hewlett-Packard (HP) from launching a bidding war on August 23rd. The computer giant offered to buy 3Par, a data-storage firm, for $1.5 billion, topping the $1.15 billion offered a week earlier by Dell, a longtime rival of HP. On August 19th Intel, a chipmaker, splashed out $7.68 billion to buy McAfee, an antivirus-software firm. Nor is the fun confined to high-tech. On August 17th PotashCorp, a firm that mines potash, from which fertiliser is made, received and promptly rejected a $38.6 billion offer from BHP Billiton, a mining giant. BHP is now pursuing a hostile bid. Investment bankers are delighted. This quarter will probably see more mergers and acquisitions (M&A) than any since the crash (see chart). Is a new merger wave, widely predicted in the past year, finally breaking? M&A is a confidence game, reckons Carsten Stendevad of Citigroup’s corporate-finance advisory arm. That makes the recent increase in activity surprising, since business confidence has been weak, he says. However, the coincidence of several deals happening at once may make other bosses pluck up the courage to make a move. “It’s the front-page effect,” says Mr Stendevad. Not everyone thinks such deals are wise. Yet, even allowing for macroeconomic uncertainty, conditions are ripe for a surge in them. For a start, potential buyers are brimming with cash. Firms in America and Europe built up record reserves during the crisis, out of fear. If they don’t spend them, investors will demand bigger dividends or share buy-backs. The tough economy has helped the top firms in many industries to strengthen their position, in terms both of market share and of stockmarket valuation. These firms are now well-placed to do the sort of consolidating deals that tend to deliver better results to investors than the supposedly “visionary” strategic mergers that are more common when the economy is booming. So far, the bosses of weaker firms have typically resisted takeovers by telling their shareholders that the market is undervaluing their shares and that they will soon perk up. These shareholders may now be losing patience. Publicly traded firms are reluctant targets, but there are many willing corporate brides in the portfolios of private-equity firms. Having raised a stack of cash and often paid over the odds during the bubble years, private-equity firms are under huge pressure to return some money to their investors. Many would like to raise new funds, which is easier if you can show that the previous one wasn’t a complete disaster. At the same time, some private-equity firms have regained their taste for acquisitions: witness Blackstone’s $4.7 billion purchase of Dynegy this month, the biggest private-equity deal since 2007. A growing share of new deals will be in emerging markets and involve raw materials. For example, Vedanta, an Indian mining and energy firm, recently announced it was buying a majority stake in Cairn Energy’s Indian oilfields for $8.5 billion. The trend of emerging-market multinationals buying firms in rich countries faltered after the market crash. Acquirers such as Lenovo, a Chinese firm that bought IBM’s personal-computer business, found they had not got their money’s worth. But with stronger growth in emerging markets filling the coffers of local firms, their appetite for adventure in the old world is returning. So, too, in the offices of the sovereign-wealth funds that got burned last time. Sovereign funds invested around $12 billion in corporate acquisitions in the second quarter of this year. That is modest, but a big leap from $1.1 billion in the first quarter. The next few weeks will be crucial. M&A activity may slump as quickly as it surged as bosses return from their summer holidays to find the economy still in trouble. But history suggests that once a merger wave begins, it can grow quickly. Mr Stendevad of Citigroup points out that in the first two years of the rebound in deals after the recession of the early 1990s, global M&A volume rose by 25% and 24% respectively. In the first two years of recovery after the downturn of 2000-01, it grew by 40% and 43%. Will history repeat itself? Full Text RSS Feeds | WordPress Auto Translator
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Permanent Life Insurance: Worth The Money?
Posted on 11. Jul, 2010 by admin.
Buying life insurance requires a lot of thought and planning. For most people, the choice is between a permanent life policy and a term life policy. Here’s a bit of information on permanent life insurance to help you make a better-informed decision.
Permanent life explained
Permanent life insurance will remain in effect until the insured dies, after [...]
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Cheap Life Insurance Go For a Joint Life Insurance Policy to Save Money
Posted on 02. Jul, 2010 by admin.
With so many different life insurance policies that are now available in the market deciding on one can be a challenging task. A number of people just get nervous even on the thought of discussing life insurance for the reason that it deals with the death of a family member. Dealing with a death of [...]
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Quitting Smoking Could Save You Money on Life Insurance
Posted on 19. Jun, 2010 by admin.
It’s the beginning of a new year and a lot of us are still suffering a hangover form last year, a financial hangover. The troubled times from last year have left many of us worrying about the future and whether we can afford to live to the same standard we have been used to for [...]
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Money Saving Auto Insurance Tips
Posted on 10. Jun, 2010 by admin.
Everyone likes to save money and your automobile insurance is a great place to find savings. You’re most likely required by state law to carry auto insurance on any car you own and auto insurance costs can vary widely.
Here are eight tips to help you start saving money with your automobile insurance.
1. Compare auto [...]
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Save Money on Insurance
Posted on 09. Jun, 2010 by admin.
Insurance is essential to protect you and your small business in case of a disaster like fire, theft, accident, etc. In today’s litigious society, insurance protects also you if you or your business is sued. You must get an appropriate amount of insurance to cover yourself and your business. Remember, insurance is expensive. Premiums can [...]
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How Purchasing Travel Insurance Can Help You Save Money
Posted on 05. Jun, 2010 by admin.
Whether you are traveling for business or pleasure, purchasing travel insurance can help save you money. It is the same principle that applies when you buy something of value like a car or a classic piece of jewelery. Should anything happen, you do not want to lose your investment in one day. Most likely, you [...]
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Save Money and Protect Yourself With Term Life Insurance!
Posted on 04. Jun, 2010 by admin.
Term life insurance is an affordable way of protecting your family’s future. With the thought of protecting loved ones, there are some helpful ways to save money while getting optimal protection. When purchasing life insurance, keep the following things in mind:
Most people feel that life insurance is not necessary at a young age. Even though [...]
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Auto insurance shopping online
Posted on 31. May, 2010 by admin.
If you are a car owner, you surely know the deal. You need to get your favorite thing insured. It gets very complicated on the roads without insurance. There are too many people on the left and on the right, that can make a mistake at any hour or minute. You have to be [...]
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Save Money on Auto Insurance
Posted on 29. May, 2010 by admin.
There are many things you can do to save money on auto insurance. Some consumers are paying thousands per year in car insurance. Here are some tips you can use to get your premiums lowered.
1) Online comparison between auto insurance companies is essential in finding the lowest price and the best rates. You can [...]
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