The Morning Morsel: M&A Is Back

There has been about $80B in deals announced this week, and gone are the days of those insulting cash “and” stock offers. Corporations are sitting on about $3 trillion loot cakes and frankly know that they can’t grow organically because the “uncovery” is preventing it. So what to do? Buy back stock? Well, they did that in 2008, the market crashed and it didn’t matter anyway. So let the mergers begin.

BHP is gunning for POT, INTC just bought MFE (both deals all cash) and this morning Korea National has decided to go hostile for Dana Corp.

It’s still cheaper to drill for oil on the floor of the New York Stock Exchange than in the dirt or underwater, so I expect to see more action on that front. Technology mergers aren’t done yet either, there is just to much cash out there that needs to be put to work.

Companies are so desperate to get a return on capital that even the broken home builder market is starting to get some chatter as a merger hot spot.

Big biotech is in the game too as Sanofi is trying to buy Genzyme and there is a rumor just about once a week that Astra Zeneca may buyout Dendreon, not to mention all the smaller deals tat seem to get done on a weekly basis in that sector.

Some names to watch over the next six months that could get bids are: AKAM, GILD, CELG, AGN, X, ESV

Have a great day trading.


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