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Wall Street bracing for record M&A year
(AP) — The corporate mergers and acquisitions business has been so strong during the first two months of 2006 that investment bankers are predicting a record year for deals.
Analysts attribute the increase in deals in part to heightened activism among investors such as hedge funds that are pushing companies to sell off unprofitable business units. Another factor is the long-held belief that buying a competitor is the fastest way to expand a company.
"It is easier to buy something than build it from scratch," said Andrea Pericli a portfolio manager with Euclid Financial Group, a Washington, D.C.-based hedge fund. The year has already brought Boston Scientific Corp.'s $27.2 billion acquisition of Guidant Corp. and The Walt Disney Co.'s $7.4 billion purchase of Pixar Animation Studios Inc.
During the first eight weeks of the year, 4,037 deals worth $473 billion were announced, compared with 4,971 totaling $378 billion in early 2005, according to Thomson Financial, a business information company that tracks merger activity. That's the second most active start for Wall Street since early 2000, when AOL bought Time Warner in a deal then worth $182 billion and there were 6,061 transactions worth $728 billion.
Last year, bankers put together $2.7 trillion worth of announced mergers and acquisitions or about 32,900 deals, far above the 31,300 worth $1.96 trillion announced in 2004, Thomson Financial said.
The record for mergers was set in 2000, during the high-tech bubble, when bankers assembled 38,468 deals worth $3.6 trillion.
"We're very optimistic about 2006. The trends driving the markets all seem to have a fair amount of wind at their back," said Michael Boublik, a senior mergers and acquisitions investment banker at Morgan Stanley.
©Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Wall Street bracing for record M&A year
(AP) — The corporate mergers and acquisitions business has been so strong during the first two months of 2006 that investment bankers are predicting a record year for deals.
Analysts attribute the increase in deals in part to heightened activism among investors such as hedge funds that are pushing companies to sell off unprofitable business units. Another factor is the long-held belief that buying a competitor is the fastest way to expand a company.
"It is easier to buy something than build it from scratch," said Andrea Pericli a portfolio manager with Euclid Financial Group, a Washington, D.C.-based hedge fund. The year has already brought Boston Scientific Corp.'s $27.2 billion acquisition of Guidant Corp. and The Walt Disney Co.'s $7.4 billion purchase of Pixar Animation Studios Inc.
During the first eight weeks of the year, 4,037 deals worth $473 billion were announced, compared with 4,971 totaling $378 billion in early 2005, according to Thomson Financial, a business information company that tracks merger activity. That's the second most active start for Wall Street since early 2000, when AOL bought Time Warner in a deal then worth $182 billion and there were 6,061 transactions worth $728 billion.
Last year, bankers put together $2.7 trillion worth of announced mergers and acquisitions or about 32,900 deals, far above the 31,300 worth $1.96 trillion announced in 2004, Thomson Financial said.
The record for mergers was set in 2000, during the high-tech bubble, when bankers assembled 38,468 deals worth $3.6 trillion.
"We're very optimistic about 2006. The trends driving the markets all seem to have a fair amount of wind at their back," said Michael Boublik, a senior mergers and acquisitions investment banker at Morgan Stanley.
©Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
posted by Jones Lang LaSalle NJ News Blog at 11:42 AM
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