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"The Goldilocks era of post-crisis M&A has never been an if, but a when," says JPMorgan...

"The Goldilocks era of post-crisis M&A has never been an if, but a when," says JPMorgan (JPM) vice-chair James Lee. "CEOs are declaring that day has come." Including the Berkshire buy, $40B in deals were announced yesterday and $140B this month. Transaction volume is up 27% Y/Y vs. an 8% slump for 2012. It should mean sweet profits for the newly lean banks.
Comments (8)
  • Chris DeMuth Jr.
    , contributor
    Comments (4056) | Send Message
     
    This could be a good opportunity for event driven funds.
    15 Feb 2013, 08:26 AM Reply Like
  • Uncle Pie
    , contributor
    Comments (2726) | Send Message
     
    Big M&A always occurs AFTER the market has had a big run. Same again this time around. Everyone is drinking the same Kool-Aid.
    15 Feb 2013, 08:42 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4056) | Send Message
     
    I agree that big M&A occurs after the market has had a big run.

     

    As for everyone drinking the same Kool-Aid, I guess it depends upon what one is doing with the M&A opportunities. In fact, many of the deals involve substantial return of capital, such that investing in these securities may involve less directional risk than other investment tactics.
    15 Feb 2013, 09:21 AM Reply Like
  • Zenith Strategies
    , contributor
    Comments (442) | Send Message
     
    Awesome. Companies with little to no organic growth overpay for another company creating massive amounts of goodwill and is similar to pre crisis non-sense.
    15 Feb 2013, 09:34 AM Reply Like
  • wil3714
    , contributor
    Comments (1676) | Send Message
     
    which ones?
    15 Feb 2013, 10:30 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4056) | Send Message
     
    That is M&A for you. Unfortunately, quite an apt description of most deals.
    15 Feb 2013, 10:36 AM Reply Like
  • Greenfire87
    , contributor
    Comments (629) | Send Message
     
    According to nawindpower.com,

     

    over 40% of the wind power industry is consolidating thru m&a right NOW!
    15 Feb 2013, 01:38 PM Reply Like
  • Deltascared
    , contributor
    Comments (289) | Send Message
     
    There are about 15 reasons for all the M & A and looking to the idea that it is predicated on a market top is supported by history but is not the real impetus and probably not the most active ingredient.

     

    First, it just started. Let us see how long it lasts. We have another fiscal cliff and that could change lots of things.

     

    Then there is the little matter of a over a trillion in cash earning about enough to pay the finance staff to keep finding holes for it and spinning ideas to justify ducking the notion giving it to shareholders.

     

    Also, the bad loans and investments by the banks have begun to come into a clear scope and focus and the cleanup after the party and home giveaway theory of the last two decades is well under way. There were pronouncements from Fitch or some other umpire of MS in the last week or so on this very issue. Of course, the real work has been carried out over years.

     

    Here is the KEY:

     

    If the M & A continues or even builds and we avoid a collapse in Europe and somehow keep our taxing and spending in a comfort zone without having Moodys suggesting the purchase of firearms, canned goods and gold, the income to the banks will soar.

     

    The profits from M & A are considerable. With the potential volume sitting in the financial sector, (something nobody disputes) even a smoldering, singing fire will have a big impact. Then stocks like MS will do very well. A wildfire of M & A will be almost like giving the actors a key to Fort Knox. And in either case, the balance sheets will become palpably stronger so the red ink of the toxic past and the concomitant reserve concerns will rapidly pale.

     

    This will hold true even with some inflation worry or the inevitable comments about the giant sized noodle maker acquiring a flat bread plant expecting to produce earnings consistent with the makers of wedding cakes and caviar.

     

    Interesting.
    18 Feb 2013, 12:10 PM Reply Like
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