Tuesday, February 28, 2006

globeandmail.com : Mergers hit $166-billion

Takeovers have been coming fast and furious of late in Europe and North America. The NY Times' Deal Book reported on trend from a global perspective today. I'll try to further summarize this activity.

First Canada' Globeandmail.com reports on the large spike in Canadian activity: Mergers hit $166-billion:
"Merger-and-acquisition activity in Canada jumped 47 per cent to a near-record $166-billion last year amid “ideal market conditions,” investment banker Crosbie & Company Inc. said Monday.

All told, there were 1,244 announced transactions in 2005 — a rate of more than three a day, seven days a week, and a 42-per-cent increase over the 875 deals in 2004."
The large number of deals has of course drawn politiacl interests as politiicans in many countries try to block some deals. From the NY Times:

"In the past month, efforts in continental Europe to keep foreign buyers out have spread. In the latest instance, French politicians said last weekend that the private utility Suez and Gaz de France would merge, effectively halting a bid by Enel, an Italian company, for Suez.

Elsewhere, the intrusion has been subtler, but palpable. In the United States, lawmakers have raised security concerns over Dubai Ports World's takeover of the British company Peninsular & Oriental Steam Navigation, which manages some United States ports. In Britain, officials fretted earlier this month over scrutiny by Gazprom, the Russian government-controlled monopoly, of the British gas company Centrica as a possible takeover target.

Around the world, globalization has lowered barriers to entry. But some of its costs, like large-scale job losses, have created fertile conditions for politicians hoping to build national champions and keep out foreign buyers. Also, national security concerns — about everything from energy sources to ports — have coalesced into government action to keep strategic assets out of foreign hands."

(for more on this protectionism see Business Week as well)

Finally Bloomberg reports that the surge in M&A activity has led to higher profits at banks such as the Bank of Scotland:
"Revenue gained 14 percent to 25.6 billion pounds....[at the] Bank of Scotland, the biggest arranger of leveraged loans in Europe, benefited from a surge in takeovers by buyout firms that spurred borrowing last year.

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