M&A 1-6/2003

Doomwatch^TM vs. Timesizing^®

Mergers&Acquisitions - Jan-Jun/2003

6/28-30/2003 our takeover tracking has narrowed to biggies&banks & overviews, blocks, blasts, downsides, connections, singularities, speedups, delays, & reversals -

6/28 $1.6B deal creates NYC area's 2nd-biggest S&L - New York Community Bancorp to purchase Roslyn Bancorp, by Joseph Treaster, NYT, B2.
6/30 American companies look to Europe for acquisitions, by Anita Raghavan, WSJ, C1.
LONDON - Getting less bang for the buck hasn't stopped U.S. companies from going on a European-mergers shopping spree. American corporations bought $11.9B in European assets during Q2, helping to bring announced European M&A deals to $137.9B for Q2 through Friday, down 14% from the year-earlier period but eclipsing U.S. merger activity of $90.1B, according to preliminary data provided by Thomson Financial, a research firm....

6/27/2003 our takeover tracking has narrowed to blocks, banks, biggies, blasts, overviews, downsides, connections, singularities, speedups, delays, & reversals -

[good news for a change -]
Billionaire's bid for Circuit City is rejected, by Elisabeth Malkin, NYT, C3.
Carlos Slim Helu, chairman of Telefonos de Mexico and Latin America's richest man, made an $8-a-share offer to buy Circuit City Stores but the bid was rejected, both sides said....

6/26/2003 our takeover tracking has narrowed to biggies, banks, blocks, blasts, overviews, downsides, connections, singularities, speedups, delays, & reversals -

Merger of Nestle and Dreyer's gains F.T.C. support, by Sherri Day, NYT, C7.
The Federal Trade Commission [FTC] said yesterday that it would allow Nestlé to proceed with the $2.8B merger of its U.S. ice cream business with Dreyer's Grand Ice Cream....
A.I.G. to buy General Electric's life insurance unit in Japan - A $2.6B deal will also include U.S. auto and home insurance units, by Joseph Treaster, NYT, C2.
The American International Group, one of the world's largest insurers, is [A.I.G.]....
[Followup -]
A.I.G. to buy three General Electric insurance units [for $2.1-2.2B], by Joseph Treaster, 6/27/2003 NYT, C3.

6/24/2003 our takeover tracking has narrowed to blocks, banks, biggies, blasts, overviews, downsides, connections, singularities, speedups, delays, & reversals -

[2 birds with one stone - blocking banking mergers -]
Canada issues moratorium on bank mergers, Dow Jones via WSJ, A14.
[Whoa, OK to gay mergers, nix to banking marriages & pre-emptive unilateral wars - Canada's really moving ahead!]
TORONTO - Canada's big banks won't be allowed to merge until at least Sept/2004,...Finance Minister John Manley said. The complexity of the sector and the need to ensure that all Canadians have access to financial services mean the government needs more time to study the issues, Mr. Manley said.
He said the government will also need more time because it plans to consider cross-pillar mergers - those between banks and other financial institutions such as insurance companies - as part of an overall merger policy for the industry.
[Good thinking. Dopey neo-con artists in the U.S. just repealed the protections of the Glass-Steagall Bill, passed during the Great Depression to help prevent a recurrence of same by separating banking, brokerage and insurance. Now that history-dissing American "leaders" have repealed it under the guise of "reforming" banking (not to mention their so-called "reforms" of bankruptcy laws and any number of other hard-learned lessons), they have doomed their economy to repeat that painful historic episode on a much huger scale that will make the Great Depression look like a small-town band concert. In some things (like health insurance for another instance), Canada seems to be just a little brighter bulb -]
"This is is no longer just about banks, no longer just about retail banking operations - we're looking at the financial sector as a whole," Mr. Manley said.
[Radical! Wholistic thinking! John Ashcroft, find a way to arrest or at least gag that deviant Canadian! This is more subversive than merely a bared breast on a statue of Justice!]
Small business and consumer groups are opposed to bank mergers, fearing it will lead to local bank branch closures [as in the Fleet-BankBoston merger], job cuts [as in the Fleet-BankBoston merger], higher fees [as in the whole bank-merger scene the last 10-15 years - remember when stop-payment fees were $5 max? remember when there were no $30 monthly "late fees" on your credit cards?] and possibly more difficulty for enterpreneurs seeking loans.
[The U.S. pays lip service to small business and repeatedly tries to set it up as some kind of rescuing cavalry, but compared to the favoritism and pork and fraud cushioning for the biggies, small businesspeople are screwed. And check out the usual line of whining from Canada's big banks -]
But Canada's banks say they require consolidation to compete in international markets.
[Who says they have to compete in international markets? All they have to do is serve Canada well, and SHADDAP! If bank CEOs want excitement, let them go bungy-jumping. They've recently been pulling out of some of their riskier foreign adventures anyway.]
The government turned down two separate proposed bank merger deals in 1998, but the...issue was revived last year when Bank of Montreal [the disgraceful clowns that moved their HQ to Toronto?!] and Bank of Nova Scotia were reported to have approached Canadian PM Jean Chretien with a merger proposal. The merger plans were reportedly scuttled, as were talks between insurance firm Manulife Financial Corp. and Canadian Imperial Bank of Commerce [CIBC].
Mr. Manley also said he'll seek public comment on the controversial question of whether banks and insurance companies can merge.
[Mayhap he can glean our leanings from the above kibitzes.]
Biogen, Idec Pharmaceuticals to merge in stock swap - Deal valued at $6.4B creates no.3 biotech firm, lifts drug-research efforts, by Armstrong & Hamilton & Sidel, WSJ, A3.

6/21-23/2003 our takeover tracking has narrowed to overviews, blocks, blasts, biggies, banking, downsides, connections, singularities, speedups, delays, & reversals -

[overall bad news - the recession clinchers are starting to "crawl out of their bunkers" -]
6/23 Mergers return, in '90s shadow - Is it just another false start [here's hopin'!], or kickoff to more acquisitions? [oh nooo, Mr. Bill!], by Robin Sidel, WSJ, C1.
[The 2 lethal bugs in mergers? Less overall system diversity-variability-survival ability, and more downsizing of overall-system workforce = consumer base. You don't see species-rich highly survival-capable rain forests merging and consolidating very much. You just see damn-fool humans cutting/burning them (and their own survival chances) down.]
1. American Express Financial Advisors...plans to buy Brit-based Threadneedle Asset Mgmt Holdings...for about $570m....
2. Oracle Corp. launched a hostile takeover of PeopleSoft...aimed at scuttling [an]other deal...being pursued by PeopleSoft..\..
3. Zimmer Holdings Inc. made an unsolicited bid for...CenterPulse....aimed at scuttling [an]other deal...being pursued by...CenterPulse....
4. General Dynamics Corp. agreed to buy Veridian Corp. for $1.2B...
5. United Technologies Corp. inked a purchase of Chubb PLC for $1B.
6. WellPoint Health Networks Inc...agreed to buy Cobalt Corp. for about $900m....
7. An initial round of bids are due today in the...sale of Vivendi Universal SA's entertainment assets...expected to fetch about $10B.
8. Last week, WPP Group PLC won a tussle with France's Publicis Groupe SA to buy debt-ladene advertising agency Cordiant Communications Group PLC for about $170m.
9. ...Earlier this month, 4 European private-equity firms won a hotly contested auction for the telephone-directories business of Italy's Seat Pagine Gialle SpA [for] $6.6B [in] Europe's biggest leveraged buyout ever....
Triggering the increased activity:
- the stock market's [merely liquidity-driven!] rally,
  [new bubble alert!]
- low interest rates that make it easier for companies to fund acquisitions
  [a distinct downside to interest-rate fiddling as a (purely cosmetic!) economic control mechanism]
- and a view that selective growth through acquisitions can be a good thing.
  [shortcut 'growth' thru acquisitions isn't overall system growth - it's merely taking from Peter to pay Paul, a zero-sum game]
...Still, the renewed interest in mergers and acquisitions ['M&As'] is fragile....
[Nooo kidding?! Especially when the whole M&A process is inherently self-undermining and will eventually be designed OUT of human activity. Look at the sums involved in the mostly destructive rather than productive examples cited above. Do you get a funny feeling that these people have much MUCH more money than sense? - that somehow our jerry-built excuse for an economic 'system' today, and the self-befuddling labyrinth of thought ruts that pass for economic theory, are just so much masturbation that props a pathetic, bankrupt, wasteful and self-corroding juggernaut of unpleasantness, that kinda makes you wish you were born a coupla centuries later so you could get on with some really important scientific research about our past and our future instead of pouring our your life on this self-hyping but at bottom, boring and repetitive and meaningless M&A water-treading?]
[one unit of specific good news]
6/21 PeopleSoft board votes to reject $6.3B bid by Oracle, by Laurie Flynn, NYT, B3.
[Colleague Kate points out that Oracle chief Ellison has said in a memo that he just wants to terminate PeopleSoft's competing database product, which is probably what he did to Information Resources' database products, Express and pcExpress, once he bought that part of that company. He wants a monopoly, and that's why excellent Atty. Gen. Richard Blumenthal of Connecticut, and now other attys.gen., are suing Oracle to get Ellison to lay off.]

6/20/2003 our takeover tracking has narrowed to blasts, biggies, blocks, downsides, connections, singularities, banking, speedups, delays, summaries & reversals -

Merger from hell - Alec Klein's "Stealing Time: Steve Case, Jerry Levin, and the Collapse of AOL Time Warner" - AOL's all-elbows business practices helped strangle the goose laying the golden eggs, book review by Gordon Crovitz, WSJ, W10.

6/17/2003 our takeover tracking has narrowed to singularities, biggies, blocks, downsides, connections, blasts, banking, speedups, delays, summaries & reversals -

[do takeover artists ever pay zero, you ask? - apparently yes, but this is the first we've noticed in four years of watching -]
Best Buy sheds Musicland in no-cash deal, AP via NYT, C3.
The Best Buy Co. said yesterday that it had shed its troubled Musicland subsidiary, turning it over to Sun Capital Partners, a private investment company based in Boca Raton FL. Sun Capital paid no cash but assumed all of Musicland's liabilities including its lease obligations. Musicland operates about 1,100 Media Play, Sam Goody, and Suncoast stores across the country. Best Buy, based in Minneapolis, paid nearly $700m for Musicland two years ago, but said in March it planned to sell the subsidiary after...the group failed to meet Best Buy's expectations.
[No indication how much the liabilities were. Betcha Sun Capital just wanted the Suncoast stores. Meanwhile, $700m flushed down the drain. What you or we could have done with that kinda dough!]

6/12/2003 our takeover tracking has narrowed to biggies, blocks, downsides, connections, blasts, banking, speedups, delays, summaries & reversals - today 3 biggies (bad) & 1 block (good) -

Private-equity firms to acquire Italian business for [5.65B euros] $6.6B, by Portanger & Galloni, WSJ, C5.
In Europe's largest leveraged buyout, a group of 4...British firms BC Partners, Permira, and CVC Capital Partners, and Italy's Investitori Associati...squeezed out 3 rival groups of U.S. and European private-equity firms to win..\..the telephone-directories unit of Italy's Seat Pagine Gialle SpA....
Royal Bank of Scotland to buy Churchill Insurance in $1.83B deal [from Credit Suisse], by Beckett & Greil, WSJ, C5.
United Technologies seals $1B deal [for Chubb PLC], by Raghavan & Sidel, WSJ, C5.
[1 block = good]
Bertelsmann's decision, pointer blurb (to B1), WSJ, front page.
...not to buy AOL's book-publishing unit [for over $300m] has chilled relations between the firms and could jeopardize their music deal.

6/10/2003 our takeover tracking has narrowed to downsides, biggies, connections, blasts, banking, speedups, summaries, delays, blocks & reversals -

Mergers make it tougher to punish federal contractors - As industry consolidations thin ranks of service providers, Washington seeks to fine-tune rules to debar lawbreakers, by AnneMarie Squeo, WSJ, A4.

6/09/2003 our takeover tracking has narrowed to biggies (2 today), connections, blasts, banking, speedups, summaries, delays, blocks & reversals -

Swiss miner Xstrata wins takeover bid for MIM in $2.29 billion deal, Dow Jones via WSJ, A12.
Warburg Pincus to buy TransDigm Holding for $1.1B [from Odyssey Investment Partners], by Robin Sidel, WSJ, A3.

6/03/2003 our takeover tracking has narrowed to biggies, connections, blasts, banking, speedups, summaries, delays, blocks & reversals -

PeopleSoft to buy J.D. Edwards for stock valued at $1.58B, by Mylene Mangalindan, WSJ, A3.
Franco-Spanish company [Altadis SA] buys 80% of Morocco tobacco firm [Regie des Tabacs Marocains, for 1.29B euros ($1.52B)], Dow Jones via WSJ, D4.

5/30/2003 our takeover tracking has narrowed to biggies, connections, blasts, banking, speedups, summaries, delays, blocks & reversals -

Hometown America is buying Chateau Communities for $1B, Bloomberg via NYT, C4.

5/20/2003 our takeover tracking has narrowed to connections, biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

In a low key, new E.D.S. chief [Michael H. Jordan] hopes to regain skeptics' trust - A CBS alumnus [Jordan] says corporate life isn't just about mergers, by Romero with Feder, NYT, C1 & C7.
[Now CEOs need to move on to "Corporate life isn't at all about mergers"!]

5/15/2003 our takeover tracking has narrowed to connections, biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

Clear Channel dominance is at issue, pointer digest (to C8), NYT, B1.
The FCC is trying to devise fules aimed at breaking the hold Clear Channel Communications has on radio markets in some rural areas, a commissioner, Kathleen Abernathy, said. "Because of the way our markets are defined, in certain markets they've clearly acquired more power than we would have wanted," said Ms. Abernathy....
[Isn't this a little late? Clear Channel already owns 60% of radio stations in America. They're the ones that staged the bulldozing of the Dixie Chicks' CDs. They only believe in free speech when they're speaking. What a bunch of idiots at the FCC! They're finally getting worried about media consolidation while at the very same moment the clowns in Congress are trying to consolidate it even further. See Krugman's "China syndrome" op ed two days ago on 5/13/2003 #5. This is what brings down a great country. Sheer short-sighted stupidity and unextended self-interest. Soon a few of these morons will be highly guarded, highly movement-restricted poohbahs in a big banana republic, and the rest will join the general poverty of the neo-peasantry.]

5/03/2003 our takeover tracking has narrowed to connections, biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

Wal-Mart agrees to sell food supplier - Berkshire Hathaway to pay $1.45B [for McLane Co. division], by Constance Hays, NYT, B1.

4/15/2003 our takeover tracking has narrowed to connections, biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

Pfizer gains FTC approval to buy Pharmacia [for $57B], Bloomberg via NYT, C4.
[If it's that expensive, it's gotta "in restraint of trade." The easy way to do this would be to simply abolish costly and lame government regulation and just ban any mergers over $1B.]
Australia: Murdoch sells a unit [even as he pays $6.6B for control of DirecTV], by John Shaw, NYT, W1.

4/10/2003 our takeover tracking has narrowed to connections, biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

[we don't often get the toxic takeover-downsizing connection as blatant as this -]
The U.S. Steel Corp. said it would cut 5,700 jobs, or about 20% of the workforce of the combined companies, if it wins [with its $950m] bid for the National Steel Corp. over a rival, the AK Steel Holdings Corp. [and its] $1.13B offer....

4/08/2003 our takeover tracking has narrowed to biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

[biggy]
Mine owner [MIM Holdings] in Australia being bought - British-Swiss bidder [Xstrata] in $2B deal, by Christine Whitehouse, NYT, W1.
[banking]
United Bankshares [Parkersburg WV] to buy Sequoia Bancshares for $109m, Reuters via NYT, C4.
[block]
World watch -...The Americas -...Briefly, WSJ, A12.
BUENOS AIRES - Argentine Pres. Eduardo Duhalde...will block the sale of Transener, the country's largest high-voltage electricity provider, to Brazil's state oil company Petroleo Brasileiro SA....

4/05/2003 our takeover tracking has narrowed to biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

Mercator Software rejects takeover offer, Reuters via NYT, C4.
...A software maker based in Wilton CT..\..said yesterday that its board had rejected a $74m hostile takeover bid from a private investment firm...Strategic Software Holdings....

4/4/2003 our takeover tracking has narrowed to biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

Unlikely enforcer - Ardent Reaganite plays a new tune as head of the FTC - Once branded an ideologue, Mr. [Tim] Muris now challenges mergers - selectively, by John Wilke, WSJ, front page.
WASHINGTON - Early in the Reagan administration, lawmakers hauled a young Federal Trade Commission [FTC] official before a congressional committee and accused him of trying to dismantle the agency.... The...Republican revolutionary was branded as an ideologue, bent on abandoning consumer protection and undermining antitrust law.
After a decade in academic exile, Mr. Muris now runs the FTC - and is one of the most activist Bush administration regulators.
[which may not be saying much.]
Indeed, of the few federal regulatory agencies that really matter, his stands out because it's functioning vigorously:
["vigorously" is a relative term -]
- The FCC is nearly paralyzed, with board members in open revolt against the chairman;
- Harvey Pitt went down in flames at the SEC;
- and the Justice Dept. antitrust chief, Charles James, resigned amid criticism that he was a reluctant enforcer who caved on the Microsoft...case.
[In short, a real functional government.]
Mr. Muris [at the FTC, however,] has become an aggressive enforcer.
- He's filed lawsuits against drug makers for cutting cozy deals with rivals
- and moved to protect competition where it is lacking in the healthcare business by investigating hospital mergers and alleged price fixing by doctors' groups.
- He has clipped attorneys' fees in class-action cases
- and told lawyers they aren't needed to close real-estate transactions.
- He has scolded funeral directors for banning online casket sales
- and targeted state rules used to restrict the sale of wine on the Internet.
- He has forced Microsoft to drop plans to harvest consumer data from its software,
- and in antitrust - despite predictions that he'd be a soft touch for business - he has challenged mergers in markets from ice cream to pickles.
- Mr. Muris' most visible public legacy may be a federal "do not call" system to protect Americans from telemarketers, which he pushed through despite resistance from his own party in Congress. The system could be in operation as soon as this summer....
What happened to Tim Muris, the foot soldier in the Reagan revolt?
...Mr. Muris no longer sees government as the enemy. "I'm an activist when it comes to enforcing the rules of the game," Mr. Muris says. "But the rules are there to make free markets work - not to replace them."...
[Good Lord, someone with common sense in the Dubya administration! Quick, Dick, replace him!]

4/03/2003 our takeover tracking has narrowed to biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

[biggy #1 (bad)]
First Data says it plans to buy rival [Concord EFS] for $7B [6.8], AP via NYT, C7.
[Hello, hello, antitrust, ah you thayah?]
[biggy #2 (bad)]
Buffett finds home for Clayton Homes - Berkshire Hathaway's $1.7B deal surprises investors, by Hallinan & Kim, WSJ, B3.
[block (good)]
Hewlett-Packard shareholders back poison pill proposal, Reuters via NYT, C7.
...to thwart...hostile takeover....

3/28/2003 our takeover tracking has narrowed to biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

[summary]
Europe's lead over U.S. widens in merger and acquisition [M&A] deals, by Anita Raghavan, WSJ, C5.
[Pity Europe, with its advantage in free time, is determined to ruin it by outdoing us in the lead-in to layoffs and the destruction of its econodiversity and variability.]
...Announced M&As involving European targets totaled $168.2B so far this quarter, more than double the $63.5B in announced U.S. merger deals, according to preliminary data from Thomson Financial.... Even as U.S. M&A activity continued to slide from a year earlier, mergers in Europe actually rose, climbing 24% so far in the first quarter.... The U.S. was the world's most abundant M&A market for most of the 1990s, but last year, for the first time since 1991, European M&A volume exceeded U.S. activity by a hair. The gulf has widened as the leadup to war slowed U.S. business activity in the first quarter....
[So can we count on these investment bankers, parasitic tho' they be, to vote against crusading Republicans next time?]
[block]
World watch -...The Americas -...Briefly, by Gauthier-Villars & Carreyrou, WSJ, A11.
OTTAWA - A Canadian Parliamentary committee report said bank mergers must boost access to capital for small businesses and offer customer service at comparable or lower prices than before a merger.
[Yeah, and what's it going to take to enforce that?! This is exactly the same kind of guarantee that New England state governments tried to get before the big Fleet-BankBoston merger - and it didn't work. There's no mechanism for monitoring those economic details. Easier to cut the sharpshooting and just ban mergers, starting with the most economically suicidal kind, bank mergers. Bored with managing just your bank? For God's sake, better to be honest about it, QUIT and go become an actual executioner in a death-penalty state, than murder people's livelihoods with the ensuing consolidation and bloodbath of pinkslips in the name of economy-shrinking "efficiency".]
After the report's release yesterday, a government official said banks should hold off on merger proposals until the government can study the report.
[reversal?]
Enel SpA - Full-year net income fell 49%; Restructuring plan unveiled, Dow Jones via WSJ, B3.
...Cuts in telecoms, services and other noncore sectors will total 7.7B euros as [CEO Paolo] Scaroni reverses a costly diversification strategy carried out by his predecessor, who spent 11B euros to acquire Italy's 2nd-largest telecom operator Wind Infostrada in 2000.
[Does this mean he's going to sell it off again? In any event, diversification by acquisition is the same kind of usually self-defeating shortcut as building market share by acquisition. Real managers don't merge and spinoff, or hire and fire. Only the bored....]

3/26/2003 our takeover tracking has narrowed to biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

Germany: Bank sale canceled, by Reuters via NYT, W1.
The debt-laden city of Berlin abandoned the planned sale of Bankgesellschaft Berlin after rejecting the sole bid for the money-losing bank. Berlin had been trying to sell its 81% stake...for more than a year, but the only bid that it received was far less than the 1.7B euros ($1.8B) of emergency aid it provided to the bank in 2001. The bid was made by BGB Capital Partners....

3/25/2003 our takeover tracking has narrowed to biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

Airborne to sell ground operations - Deutsche Post to buy unit to bolster its U.S. push; UPS, FedEx oppose deal, by Rick Brooks, WSJ, B4.
German delivery company Deutsche Post AG, revving up for an ambitious growth push in the enormous U.S. cargo market [enormous but already overcrowded], reached a definitive agreement to acquire the ground-delivery operations of Airborne Inc. for slightly more than $1B....

3/22-24/2003 our takeover tracking has narrowed to biggies, blasts, banking, speedups, delays, blocks, reversals & summaries -

3/22 Deal making - Few outlets lately for those looking to merge or acquire, by Andrew Sorkin, NYT, C3.
[The misleading phrasing here makes the situation sound like the same phenomenon as occurred during the Great Depression = the rate of M&As dropped precipitously, and we speculated that all the potential takeover victims had been used up. See our chart of US M&As 1919-1940 on our M&As in the 20s & 90s page.]
The slump in deal making just got worse. Financiers and investment bankers were experiencing one of the worst droughts in years even before the U.S. invasion of Iraq, which has caused the delay of dozens of mergers and acquisitions [M&As] that were set to go.
[Two comments. (1) "delay" is different from "few outlets" - so which is it, (A) paucity of targets or (B) merely delay? or is it both? {later we see it's just B} (2) We shouldn't feel too sorry for these "financiers and investment bankers," because they're like the lumbermen who are clearcutting the Earth's rain forests and endangering all life on this planet (including their own) by destroying biodiversity, CO recycling and ozone protection. "Vultures" is too good a name for them, because vultures seldom attack living prey. Let's try "dumb parasites" - "dumb" in the sense of "suicidal." Suicide is fine when it affects only the lifeform that wishes to die, but in this case, as in the case of rainforest lumbermen, the lifeforms are taking all the rest of us with them. As in the case of technology, which is not bad in itself but only as it is responded to by downsizing instead of timesizing, one view is that M&As are not bad in themselves but only as they are responded to by downsizing instead of timesizing. However, since M&As also tend to homogenize corporate cultures and lose diversity of approaches as they consolidate, and since diversity is the raw material of the #1 critical variable of all time for the survival of large biosystems, namely variability itself, M&As per se are destructive to the long-term growth and even survival of their economic environment, and are the first step to economic depression, the second step being downsizing, and the third, fourth and further steps being the cumulating ripples of shrinkage that each downsizing sends throughout its economic environment. So financiers and investment bankers who make their living off M&As may be accurately compared to the AIDS virus, which is very slow-acting, varied in its effects, but generally deadly nonetheless.]
"I just stepped out of a board meeting, and we decided that there's too much uncertainty in the world to move forward right now," Steven Baronoff, who runs the M&As practice at Merrill Lynch, said Thursday about a deal he was working on. "We have a lot of clients who want to put things on hold."
[This sounds more like delay than lack of marks. Maybe we're still hovering between 1929 and 1930 in this Kondratief relative to M&A rate. So the question arises, will these wealthy M&A "dumb parasites" at least be smart enough to stop campaign-financing Bush and boost their financing of whatever non-war-starting alternative(s) may turn up?]
In the weeks leading up to the war, deal makers scrambled to wrap up projects that were close to completion and made a number of announcements right up until bombing began in Iraq on Wednesday [3/19].
- Procter & Gamble [P&G], which had been in a 3-year mating dance with Wella, the German haircare company, announced on Tuesday [3/18] its $5.5B takeover of Wella, in part to get ahead of the war.
  [We missed this biggy - till now.]
- And USA Interactive, controlled by Barry Diller, raced on Wednesday to announce its agreement to pay $3.3B in stock for the 46% of Expedia.com [travel website] it did not already own.
  [We omitted this one because Diller already had a controlling 54% stake in Expedia.]
[Note the attempted comparison with mating and marriage in the P&G case - "had been in a 3-year mating dance with Wella." This is a common metaphor for M&As. But except in cases like black widow spiders, preying mantises and some highly role-specialized species like ants, termites, wasps and bees, mating does not usually result in the shrinkage or death of one of the partners as it often does in M&As. So generally the mating metaphor is inappropriate. Appropriate is the dumb-parasite metaphor, such as a large, slow but relentless vampire, or a wasp that, stunning but not killing beetles, buries its prey with its eggs for the hatchlings to feed on.]
"We wanted to be completed with this before anything further took place in world affairs," Mr. Diller said in a conference call with investors. "If there's life, there is travel, and we certainly bet on that."
[Judging from our bankruptcy and downsizing stories today, which involve airlines, that's probably not a good bet, because there are many volume levels of "travel" in today's huge and complicated global economy, and we're still ratcheting down through those travel-volume levels, thanks to the particular blend of naivete and cynicism of Cheney and his fellow viruses embedded in the White House.]
...Despite the market's recent rise..."Any hint of war and conflict breeds uncertainty, and uncertainty leads to volatility, which is the enemy of all deals," said Robert Spatt, a partner at Simpson Thacher & Bartlett in New York. The paucity of deals reverses what analysts had speculated would be a busy spring as confidence was returning to the boardroom and dozens of companies began seeking to divest themselves of noncore assets to pare down debts.
[- many of those debts arising from companies' own previous takeover activity - taking-over market share instead of building it, as building it became more difficult with the starvation of the consumer base due to the frozen-workweek's concentration of employment and spending power.]
"People were just starting to say I'm ready to start doing deals," said Dennis Hersch, a partner of Davis Polk & Wardwell. "This is complicating that picture."...
[Well if Wardwell is in M&As, he's not warding very well. Ironically, if this generally disastrous aggression by the USA is holding up the devastation of the economic 'rainforest' by M&As, it's having one positive effect among the blizzard of paranoia and terrorism that it's stirring up. But then, it took the onset of another Very Bad Thing, namely the Great Depression, to get people off their naive idealism and take some effective regulatory measures against more or less uncontrolled imports and immigration in the early 1930s. So sometimes it takes a disaster to activate a more sensible policy.]
3/23 Fiat to sell insurance unit to publishing group for $2.5B, by John Tagliabue, NYT, A5.
In an effort to raise cash and reduce debt, Fiat has agreed to sell its insurance unit, Toro Assicurazioni...Italy's 3d-largest issuer..\..to the De Agostini publishing group of Italy for 2.4B euros, or $2.5B, Fiat said [yester]day....

3/13/2003 our takeover tracking has narrowed to biggies, blasts, banking, speedups, summaries, delays, blocks & reversals -

Credit Agricole, Dow Jones via WSJ, C14.
Credit Agricole SA said it is confident France's banking regulator won't force significant changes on its planned merer with Credit Lyonnais SA, amid signs the 2 banks will have to sell only a limited number of branches to win approval for the 19.5B euros ($21.5B) deal....

3/05/2003 our takeover tracking has narrowed to biggies, blasts, speedups, summaries, delays, blocks & reversals -

The FTC voted, pointer squib (to A12), WSJ, front page.
...to block Nestle's $2.8B acquisition of Dreyer's Grand Ice Cream.

2/28/2003 our takeover tracking has narrowed to biggies, blasts, speedups, summaries, delays & reversals -

German law helping VW is under fire - EU seeks end to takeover ban, by Paul Meller, NYT, W1.
[Is the EU really doing anything for Europe, or just helping its demise by stupidly trying to enforce the practices that qualify you for the 'race to the bottom'? The EU at the top hasn't really been that strong a force against the USA's big push to start a war against a nation at peace, and here it is trying to facilitate the consolidation and de-diversification of the biggest European economy - against that economy's will.]

2/25/2003 our takeover tracking has narrowed to biggies, blasts, summaries, delays & reversals -

Devon Energy to buy Ocean Energy for $3.5B, AP via NYT, C4.

2/22/2003 our takeover tracking has narrowed to biggies, blasts, summaries, delays & reversals -

Benetton family to control toll road operator - Most [55%] of Autostrade acquired for $7 billion [for total of 85%], by Eric Sylvers, NYT, B2.
[Here's the WSJ's headline -]
Autostrade SpA - Benetton family gains control of company in tender offer, Dow Jones via 2/24/2003 WSJ, B4.

2/20/2003 our takeover tracking has narrowed to biggies, blasts, summaries, delays & reversals -

[an instructive UNtakeover for a change -]
U.S. Bancorp says it will spin off Piper Jaffray unit, by Robin Sidel, WSJ, C1.
Another big bank deal from the late 1990s is unravelling. Acknowledging that its 5-year-old acquisition of Piper Jaffray Cos. hasn't panned out as expected, U.S. Bancorp confirmed that it would spin off the regional brokerage firm to shareholders later this year.... In spinning off Piper Jaffray, U.S. Bancorp is essentially undoing its own $730m deal....
[So the whole futile exercise turns out as a gigantic piece of private-sector makework. Who says the private sector is necessarily more efficient than the public sector? Would it were so! Another example -]
Still, the regional brokerage firm for now [our italics] looks like it will fare better than one of its old counterparts: FleetBoston Financial Corp. last year shut down Robertson Stephens Inc. after failing to find a buyer for the former highflying boutique investment bank.
[Eventually - say 400-500 years - we'll probably get bored enough with learning and relearning the costs of M&As to just ban them all together as exercises in stanglingly money-concentrating, chest-thumping, private-sector makework. But meanwhile, we definitely need to get into flexible adjustment of the workweek to offset the indirect but vast consumer-base devastation that our current takeover fad triggers.]

2/18/2003 our takeover tracking has narrowed to biggies, blasts, healthy delays & summaries -

Great-West Lifeco set to acquire Canada Life - Purchase for $4.72B will create large seller of life, health insurance, by Elena Cherney, WSJ, C9.
[Here's the type of flawed thinking that spurs acquisitions -]
Bank deals may be ahead at Citigroup - Acquisitions are seen as way to lift deposits, by Riva Atlas, NYT, C1.
[Acquisitions don't lift anything. They just consolidate them. There are other more creative and imaginative ways to actually lift deposits, such as increasing depositors. Back in the 50s and 60s when companies still grew the real way, banks would offer prizes for new depositors, such as toasters etc. Hence the famed flying-toaster screensaver of yore. Today when banks try to increase deposits by acquiring and consolidating, they wind up with fewer employees, and therefore fewer depositors and smaller deposits. Keep it up and we've got a downward spiral. Well that's two steps backward, but here's one step forward -]
Once an acquirer, TMP Worldwide decides to divide, by Riva Atlas, NYT, C1.
[Apparently Bush ain't the only one vacillating.]
TMP Worldwide can be seen as the AOL Time Warner of the employment world. Like AOL, TMP which owns Monster.com, the biggest job website, took advantage of its ephemeral dot-com wealth to buy a bunch of traditional businesses.... And now, TMP's grand plans are about to unravel. Many of its top manageres have left. Its final 2002 financial results...fell below its own targets for the 4th quarter in a row. The company has said that because this year is proving so difficult, it will withdraw its previous earnings forecasts and will no longer make forecasts. Shares of TMP...are down about 79% from the beginning of 2002.
To rectify the situation, the company plans to undo its expansion binge, splitting the company in two, separating Monster from the headhunting and staffing units, as early as next month....
[Corporate spinoffs make for economic diversity, which makes for variability and survivability.]

2/14/2003 our takeover tracking has narrowed to biggies, blasts, healthy holdups or checks, like this, & summaries-

AOL abandoned efforts, pointer summary (to A3), WSJ, front page.
...to merge CNN with Disney's ABC News, concluding that the venture would be too complex to run.
[and the indicated article -]
AOL calls off CNN-ABC deal, seeing operating difficulties - AOL executives were also worried about issues a deal could face in Washington, by Peers & Flint, WSJ, A3.
[Don't tell us US anti-trust has woken up. Compare the later squib -]
Merger difficulties, compiled by Susanne Craig, WSJ, C5.
You know it's a tough environment for mergers when even the merger classes won't merge. Classes in media mergers at Columbia and NY University business schools are still attracting students, despite blow-ups like AOL Time Warner Inc. and Vivendi Universal....
[So they're teaching the first steps toward economywide recession, cuz once they merge they start cutting overlap instead of cutting hours for all and keeping everyone working. And once they stop keeping everyone working, they start cutting their own markets.]

For earlier Mergers&Acquisitions, click on the desired date -

For more details, our laypersons' guide to our great economic future Timesizing, Not Downsizing is available at bookstores in Harvard Square, Cambridge, Mass. or from *Amazon.com online.

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