Mergers and acquisitions: Coming unstuck

QUEEN VICTORIA sniffed that “We are not interested in the possibilities of defeat.” For empire-builders in the corporate world, failure is all too common. On August 5th the octogenarian Antipodean Rupert Murdoch withdrew 21st Century Fox’s unrequited pursuit of Time Warner. The deal would have been worth at least $70 billion and have created a media monolith. Hours later Softbank, a Japanese conglomerate which owns Sprint, an American telecoms firm, abandoned its effort to buy control of T-Mobile US, another operator in America, with an enterprise value of more than $30 billion.In 2014 there have already been two other big dealmaking snafus—Pfizer’s abortive bid for a fellow drugmaker, AstraZeneca, worth $125 billion, and the union of Publicis and Omnicom. The two advertising firms were supposedly engaged in a logical impossibility: an amicable Franco-American merger of equals. In fact their executives were fighting like rats in a sack.In all, bids worth $390 billion have been terminated or withdrawn so far in 2014 (see chart). That is huge in absolute terms, though it mirrors the surge in mergers and acquisitions (M&A) this year. Typically 10-20% of proposed…

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