finance.yahoo.com Open in urlscan Pro
2001:4998:1c:800::1000  Public Scan

Form analysis
2 forms found in the DOM

/quote/

<form action="/quote/" class="finsrch-enable-perf Whs(nw) W(100%) Miw(350px) Pos(r)" data-finsrch="researchReports" fininit=""><input type="text" aria-autocomplete="list" aria-expanded="false" autocapitalize="off" autocomplete="off"
    placeholder="Search for news, symbols or companies" class="finsrch-inpt H(35px) W($searchWidth)!--maw1220 W(100%) Py(0) Px(10px) D(ib) O(n) M(0) Fz(15px) Bdrs(0) Bgc(t) Bd Bdc(#ccc)" style="display: inline-block;"
    aria-activedescendant="result-recommend-0" data-rapid_p="13" data-v9y="1"><button class="modules_clearBtn__uUU5h modules_noDisplay__Qnbur" type="button" title="Clear" data-rapid_p="14" data-v9y="0"><svg viewBox="0 0 48 48" height="16" width="16"
      class="modules_cancelIcon__52R4a" style="stroke-width: 0;">
      <path
        d="M37.98 34.827l-9.9-9.9 9.9-9.898c.78-.782.78-2.05 0-2.83-.78-.78-2.047-.78-2.828 0l-9.9 9.9-9.898-9.9c-.78-.78-2.048-.78-2.828 0-.78.78-.78 2.047 0 2.828l9.9 9.9-9.9 9.898c-.78.78-.78 2.047 0 2.828.78.78 2.047.78 2.828 0l9.9-9.9 9.898 9.9c.78.78 2.048.78 2.828 0 .782-.78.782-2.047 0-2.827z">
      </path>
    </svg></button><button aria-label="Search for news, symbols or companies" class="finsrch-btn Bgc($c-fuji-blue-1-b) C(white) H(35px) Bd(n) Bdrs(3px) Pos(r) Cur(p) Fw(500) Va(m) Bxz(bb) W(68px) Mstart(-2px)" data-rapid_p="15" data-v9y="1"><svg
      class="Cur(p)" width="24" style="fill:white;stroke:white;stroke-width:0;vertical-align:bottom" height="24" viewBox="0 0 24 24" data-icon="search">
      <path
        d="M9 3C5.686 3 3 5.686 3 9c0 3.313 2.686 6 6 6s6-2.687 6-6c0-3.314-2.686-6-6-6m13.713 19.713c-.387.388-1.016.388-1.404 0l-7.404-7.404C12.55 16.364 10.85 17 9 17c-4.418 0-8-3.582-8-8 0-4.42 3.582-8 8-8s8 3.58 8 8c0 1.85-.634 3.55-1.69 4.905l7.403 7.404c.39.386.39 1.015 0 1.403">
      </path>
    </svg></button>
  <div srchresult="true" class="modules_noDisplay__Qnbur">
    <div class="modules_suggestionList__NNFY0" style="top: 35px;">
      <div class="modules_resultsContainer__brTAq" data-id="search-assist-input-sugglst"></div>
      <footer data-id="search-assist-footer" class="modules_noDisplay__Qnbur">
        <p class="modules_tipMessage__s3k9w">Tip: Try a valid symbol or a specific company name for relevant results</p>
      </footer>
    </div>
    <div class="modules_suggestionList__NNFY0" data-id="search-assist-input-recomlst" style="top: 35px;">
      <div class="modules_sectionHeader__PO3g4 ">
        <h3 class="modules_sectionHeaderTitle__TAVUF">Trending Tickers</h3>
      </div>
      <ul role="listbox" class="modules_list__L4Xjs">
        <li id="result-recommend-0" role="option" title="BTC-USD" tabindex="0" data-type="recommend" data-test="srch-trd-sym" data-index="0" data-pindex="0" class="modules_linkItem__P-S-4 modules_selectedBackground__-Eg6s">
          <div class="modules_recLeftCol__zCoxx modules_IbBox__2pmLe"><svg viewBox="0 0 48 48" height="16" width="16" class="modules_recIcon__kR-SX" style="stroke-width: 0;">
              <path
                d="M5.793 37.242l10.46-13.865c.703-.934.515-2.26-.422-2.963-.936-.702-2.267-.514-2.97.42L2.4 34.7c-.705.933-.516 2.26.42 2.962.938.702 2.268.514 2.973-.42zm21.073 0l16.827-22.33c.704-.934.515-2.26-.423-2.962-.937-.702-2.268-.513-2.972.42L23.47 34.7c-.703.934-.514 2.26.424 2.962.937.702 2.268.513 2.972-.42zm0-2.543l-10.46-13.867c-.704-.933-2.035-1.12-2.972-.42-.937.703-1.126 2.03-.42 2.963L23.47 37.242c.704.934 2.035 1.122 2.972.42.937-.703 1.126-2.03.42-2.963zm10.82-18.9l3.503 2.393.615 3.876c.094.608.44 1.114.913 1.433.427.287.957.42 1.507.338 1.16-.177 1.955-1.257 1.776-2.41L44.23 9.913 32.857 12.59c-1.14.27-1.846 1.41-1.577 2.547.268 1.135 1.41 1.84 2.553 1.572l3.854-.91z">
              </path>
            </svg></div>
          <div class="modules_recRightCol__d5yd7 modules_Ell__77DLP modules_IbBox__2pmLe">BTC-USD</div>
        </li>
        <li id="result-recommend-1" role="option" title="LUNA1-USD" tabindex="0" data-type="recommend" data-test="srch-trd-sym" data-index="1" data-pindex="1" class="modules_linkItem__P-S-4  ">
          <div class="modules_recLeftCol__zCoxx modules_IbBox__2pmLe"><svg viewBox="0 0 48 48" height="16" width="16" class="modules_recIcon__kR-SX" style="stroke-width: 0;">
              <path
                d="M5.793 37.242l10.46-13.865c.703-.934.515-2.26-.422-2.963-.936-.702-2.267-.514-2.97.42L2.4 34.7c-.705.933-.516 2.26.42 2.962.938.702 2.268.514 2.973-.42zm21.073 0l16.827-22.33c.704-.934.515-2.26-.423-2.962-.937-.702-2.268-.513-2.972.42L23.47 34.7c-.703.934-.514 2.26.424 2.962.937.702 2.268.513 2.972-.42zm0-2.543l-10.46-13.867c-.704-.933-2.035-1.12-2.972-.42-.937.703-1.126 2.03-.42 2.963L23.47 37.242c.704.934 2.035 1.122 2.972.42.937-.703 1.126-2.03.42-2.963zm10.82-18.9l3.503 2.393.615 3.876c.094.608.44 1.114.913 1.433.427.287.957.42 1.507.338 1.16-.177 1.955-1.257 1.776-2.41L44.23 9.913 32.857 12.59c-1.14.27-1.846 1.41-1.577 2.547.268 1.135 1.41 1.84 2.553 1.572l3.854-.91z">
              </path>
            </svg></div>
          <div class="modules_recRightCol__d5yd7 modules_Ell__77DLP modules_IbBox__2pmLe">LUNA1-USD</div>
        </li>
        <li id="result-recommend-2" role="option" title="CL=F" tabindex="0" data-type="recommend" data-test="srch-trd-sym" data-index="2" data-pindex="2" class="modules_linkItem__P-S-4  ">
          <div class="modules_recLeftCol__zCoxx modules_IbBox__2pmLe"><svg viewBox="0 0 48 48" height="16" width="16" class="modules_recIcon__kR-SX" style="stroke-width: 0;">
              <path
                d="M5.793 37.242l10.46-13.865c.703-.934.515-2.26-.422-2.963-.936-.702-2.267-.514-2.97.42L2.4 34.7c-.705.933-.516 2.26.42 2.962.938.702 2.268.514 2.973-.42zm21.073 0l16.827-22.33c.704-.934.515-2.26-.423-2.962-.937-.702-2.268-.513-2.972.42L23.47 34.7c-.703.934-.514 2.26.424 2.962.937.702 2.268.513 2.972-.42zm0-2.543l-10.46-13.867c-.704-.933-2.035-1.12-2.972-.42-.937.703-1.126 2.03-.42 2.963L23.47 37.242c.704.934 2.035 1.122 2.972.42.937-.703 1.126-2.03.42-2.963zm10.82-18.9l3.503 2.393.615 3.876c.094.608.44 1.114.913 1.433.427.287.957.42 1.507.338 1.16-.177 1.955-1.257 1.776-2.41L44.23 9.913 32.857 12.59c-1.14.27-1.846 1.41-1.577 2.547.268 1.135 1.41 1.84 2.553 1.572l3.854-.91z">
              </path>
            </svg></div>
          <div class="modules_recRightCol__d5yd7 modules_Ell__77DLP modules_IbBox__2pmLe">CL=F</div>
        </li>
        <li id="result-recommend-3" role="option" title="EURUSD=X" tabindex="0" data-type="recommend" data-test="srch-trd-sym" data-index="3" data-pindex="3" class="modules_linkItem__P-S-4  ">
          <div class="modules_recLeftCol__zCoxx modules_IbBox__2pmLe"><svg viewBox="0 0 48 48" height="16" width="16" class="modules_recIcon__kR-SX" style="stroke-width: 0;">
              <path
                d="M5.793 37.242l10.46-13.865c.703-.934.515-2.26-.422-2.963-.936-.702-2.267-.514-2.97.42L2.4 34.7c-.705.933-.516 2.26.42 2.962.938.702 2.268.514 2.973-.42zm21.073 0l16.827-22.33c.704-.934.515-2.26-.423-2.962-.937-.702-2.268-.513-2.972.42L23.47 34.7c-.703.934-.514 2.26.424 2.962.937.702 2.268.513 2.972-.42zm0-2.543l-10.46-13.867c-.704-.933-2.035-1.12-2.972-.42-.937.703-1.126 2.03-.42 2.963L23.47 37.242c.704.934 2.035 1.122 2.972.42.937-.703 1.126-2.03.42-2.963zm10.82-18.9l3.503 2.393.615 3.876c.094.608.44 1.114.913 1.433.427.287.957.42 1.507.338 1.16-.177 1.955-1.257 1.776-2.41L44.23 9.913 32.857 12.59c-1.14.27-1.846 1.41-1.577 2.547.268 1.135 1.41 1.84 2.553 1.572l3.854-.91z">
              </path>
            </svg></div>
          <div class="modules_recRightCol__d5yd7 modules_Ell__77DLP modules_IbBox__2pmLe">EURUSD=X</div>
        </li>
        <li id="result-recommend-4" role="option" title="ETH-USD" tabindex="0" data-type="recommend" data-test="srch-trd-sym" data-index="4" data-pindex="4" class="modules_linkItem__P-S-4  ">
          <div class="modules_recLeftCol__zCoxx modules_IbBox__2pmLe"><svg viewBox="0 0 48 48" height="16" width="16" class="modules_recIcon__kR-SX" style="stroke-width: 0;">
              <path
                d="M5.793 37.242l10.46-13.865c.703-.934.515-2.26-.422-2.963-.936-.702-2.267-.514-2.97.42L2.4 34.7c-.705.933-.516 2.26.42 2.962.938.702 2.268.514 2.973-.42zm21.073 0l16.827-22.33c.704-.934.515-2.26-.423-2.962-.937-.702-2.268-.513-2.972.42L23.47 34.7c-.703.934-.514 2.26.424 2.962.937.702 2.268.513 2.972-.42zm0-2.543l-10.46-13.867c-.704-.933-2.035-1.12-2.972-.42-.937.703-1.126 2.03-.42 2.963L23.47 37.242c.704.934 2.035 1.122 2.972.42.937-.703 1.126-2.03.42-2.963zm10.82-18.9l3.503 2.393.615 3.876c.094.608.44 1.114.913 1.433.427.287.957.42 1.507.338 1.16-.177 1.955-1.257 1.776-2.41L44.23 9.913 32.857 12.59c-1.14.27-1.846 1.41-1.577 2.547.268 1.135 1.41 1.84 2.553 1.572l3.854-.91z">
              </path>
            </svg></div>
          <div class="modules_recRightCol__d5yd7 modules_Ell__77DLP modules_IbBox__2pmLe">ETH-USD</div>
        </li>
      </ul>
    </div>
  </div>
</form>

<form data-finsrch="quote" class="Pos(r)" fininit=""><input type="text" aria-autocomplete="both" aria-expanded="false" autocapitalize="off" autocomplete="false" autocorrect="false"
    class="D(ib) Pstart(10px) Bxz(bb) Bgc($lv3BgColor) W(100%) H(32px) Lh(32px) Bdrs(0) Bxsh(n) Fz(s) Bg(n) Bd O(n):f O(n):h Bdc($seperatorColor) Bdc($linkColor):f finsrch-inpt" placeholder="Quote Lookup" style="display: inline-block;"
    data-rapid_p="8" data-v9y="1"><button class="modules_clearBtn__uUU5h modules_noDisplay__Qnbur" type="button" title="Clear" data-rapid_p="9" data-v9y="0"><svg viewBox="0 0 48 48" height="16" width="16" class="modules_cancelIcon__52R4a"
      style="stroke-width: 0;">
      <path
        d="M24 1C11.3 1 1 11.3 1 24s10.3 23 23 23 23-10.3 23-23S36.7 1 24 1zm9.8 32.8c-.9.9-2.2.9-3.1 0L24 27l-6.8 6.8c-.9.9-2.2.9-3.1 0s-.9-2.2 0-3.1l6.8-6.8-6.7-6.7c-.9-.9-.9-2.2 0-3.1.9-.9 2.2-.9 3.1 0l6.7 6.7 6.7-6.7c.9-.9 2.2-.9 3.1 0 .9.9.9 2.2 0 3.1l-6.7 6.7 6.7 6.8c.9.9.9 2.3 0 3.1z">
      </path>
    </svg></button><button class="End(1px) H(32px) Lh(n) Va(m) Pos(a) Bdrs(2px) Px(10px) Bd Bgc($linkColor) Bgc($linkActiveColor):h Bdc($linkColor) finsrch-btn" aria-label="Search" type="submit" data-rapid_p="10" data-v9y="1"><svg
      class="Fill(white) Stk(white) Va(m)! Cur(p)" width="20" style="fill:white;stroke:white;stroke-width:0;vertical-align:bottom" height="20" viewBox="0 0 24 24" data-icon="search">
      <path
        d="M9 3C5.686 3 3 5.686 3 9c0 3.313 2.686 6 6 6s6-2.687 6-6c0-3.314-2.686-6-6-6m13.713 19.713c-.387.388-1.016.388-1.404 0l-7.404-7.404C12.55 16.364 10.85 17 9 17c-4.418 0-8-3.582-8-8 0-4.42 3.582-8 8-8s8 3.58 8 8c0 1.85-.634 3.55-1.69 4.905l7.403 7.404c.39.386.39 1.015 0 1.403">
      </path>
    </svg></button>
  <div class="W(100%) Bxz(bb) finsrch-rslt finsrch-show-ftr modules_noDisplay__Qnbur">
    <div class="modules_suggestionList__NNFY0" style="top: 32px;">
      <div class="modules_resultsContainer__brTAq" data-id="search-assist-input-sugglst"></div>
      <footer data-id="search-assist-footer" class="modules_noDisplay__Qnbur">
        <p class="modules_tipMessage__s3k9w">Tip: Try a valid symbol or a specific company name for relevant results</p>
      </footer>
    </div>
  </div>
</form>

Text Content

 * HOME
   
 * MAIL
   
 * NEWS
   
 * FINANCE
   
 * SPORTS
   
 * ENTERTAINMENT
   
 * LIFE
   
 * SEARCH
   
 * SHOPPING
   
 * YAHOO PLUS
   
 * MORE...
   
 * 


Yahoo Finance

Tip: Try a valid symbol or a specific company name for relevant results


TRENDING TICKERS

 * BTC-USD
 * LUNA1-USD
 * CL=F
 * EURUSD=X
 * ETH-USD

Sign in
Mail
Sign in to view your mail
 * Finance
   Finance
 * Watchlists
   Watchlists
 * My Portfolio
   My Portfolio
 * Cryptocurrencies
   Cryptocurrencies
 * Yahoo Finance Plus
   Yahoo Finance Plus
    * Dashboard
      Dashboard
    * Research Reports
      Research Reports
    * Investment Ideas
      Investment Ideas
    * Community Insights
      Community Insights
    * Webinars
      Webinars
    * Blog
      Blog

 * Screeners
   Screeners
    * Saved Screeners
      Saved Screeners
    * Equity Screener
      Equity Screener
    * Mutual Fund Screener
      Mutual Fund Screener
    * ETF Screener
      ETF Screener
    * Futures Screener
      Futures Screener
    * Index Screener
      Index Screener

 * Markets
   Markets
    * Calendars
      Calendars
    * Trending Tickers
      Trending Tickers
    * Stocks: Most Actives
      Stocks: Most Actives
    * Stocks: Gainers
      Stocks: Gainers
    * Stocks: Losers
      Stocks: Losers
    * Top ETFs
      Top ETFs
    * Futures
      Futures
    * World Indices
      World Indices
    * Currencies
      Currencies
    * Top Mutual Funds
      Top Mutual Funds
    * Options: Highest Open Interest
      Options: Highest Open Interest
    * Options: Highest Implied Volatility
      Options: Highest Implied Volatility
    * US Treasury Bonds Rates
      US Treasury Bonds Rates
    * Currency Converter
      Currency Converter

 * News
   News
    * Latest News
      Latest News
    * Politics
      Politics
    * Stock Market News
      Stock Market News
    * Crypto News
      Crypto News
    * Economic News
      Economic News
    * Morning Brief
      Morning Brief
    * Bidenomics Report Card
      Bidenomics Report Card
    * Adriana Belmonte
      Adriana Belmonte
    * Akiko Fujita
      Akiko Fujita
    * Alexandra Canal
      Alexandra Canal
    * Alexandra Garfinkle
      Alexandra Garfinkle
    * Alexandra Semenova
      Alexandra Semenova
    * Alexis Keenan
      Alexis Keenan
    * Andy Serwer
      Andy Serwer
    * Anjalee Khemlani
      Anjalee Khemlani
    * Ben Werschkul
      Ben Werschkul
    * Brad Smith
      Brad Smith
    * Brian Cheung
      Brian Cheung
    * Brian Sozzi
      Brian Sozzi
    * Brooke DiPalma
      Brooke DiPalma
    * Dani Romero
      Dani Romero
    * Daniel Howley
      Daniel Howley
    * Dave Briggs
      Dave Briggs
    * David Hollerith
      David Hollerith
    * Dylan Croll
      Dylan Croll
    * Edwin Roman
      Edwin Roman
    * Ella Vincent
      Ella Vincent
    * Emily McCormick
      Emily McCormick
    * Erin Fuchs
      Erin Fuchs
    * Ethan Kimball
      Ethan Kimball
    * Ethan Wolff-Mann
      Ethan Wolff-Mann
    * Ines Ferré
      Ines Ferré
    * Jared Blikre
      Jared Blikre
    * Jennifer Schonberger
      Jennifer Schonberger
    * Josh Schafer
      Josh Schafer
    * Julie Hyman
      Julie Hyman
    * Kerry Hannon
      Kerry Hannon
    * Luke Carberry Mogan
      Luke Carberry Mogan
    * Marquise Francis
      Marquise Francis
    * Michael Kelley
      Michael Kelley
    * Myles Udland
      Myles Udland
    * Pras Subramanian
      Pras Subramanian
    * Rachelle Akuffo
      Rachelle Akuffo
    * Rebecca Chen
      Rebecca Chen
    * Rick Newman
      Rick Newman
    * Ronda Lee
      Ronda Lee
    * Seana Smith
      Seana Smith
    * Sheila Bair
      Sheila Bair
    * Tanya Kaushal
      Tanya Kaushal
    * Yaseen Shah
      Yaseen Shah

 * Personal Finance
   Personal Finance
    * Home
      Home
    * My Money
      My Money
    * Retirement
      Retirement
    * Taxes
      Taxes
    * Rates
      Rates

 * Videos
   Videos
    * Yahoo Finance Live
      Yahoo Finance Live
    * Influencers with Andy Serwer
      Influencers with Andy Serwer
    * Yahoo Finance Presents
      Yahoo Finance Presents
    * Yahoo U
      Yahoo U
    * Spotlight
      Spotlight
    * Yahoo Finance All Markets Summit
      Yahoo Finance All Markets Summit
    * Events
      Events
    * ETF Report
      ETF Report
    * Davos
      Davos
    * Crypto Corner
      Crypto Corner
    * FA Corner
      FA Corner
    * America: Back in Business
      America: Back in Business

 * Yahoo U
   Yahoo U
 * Industries
   Industries
    * Saved Screeners
      Saved Screeners
    * Equity Screener
      Equity Screener
    * Mutual Fund Screener
      Mutual Fund Screener
    * ETF Screener
      ETF Screener
    * Futures Screener
      Futures Screener
    * Index Screener
      Index Screener

 * Tech
   Tech
    * Reviews
      Reviews
    * How To
      How To
    * Games
      Games
    * Video
      Video

 * Contact Us
   Contact Us

…
…
 * Industries
   Industries
    * Saved Screeners
      Saved Screeners
    * Equity Screener
      Equity Screener
    * Mutual Fund Screener
      Mutual Fund Screener
    * ETF Screener
      ETF Screener
    * Futures Screener
      Futures Screener
    * Index Screener
      Index Screener

 * Tech
   Tech
    * Reviews
      Reviews
    * How To
      How To
    * Games
      Games
    * Video
      Video

 * Contact Us
   Contact Us


U.S. markets closed


 * S&P 500
   
   3,924.26
   -42.59 (-1.07%)
    


 * DOW 30
   
   31,318.44
   -337.96 (-1.07%)
    


 * NASDAQ
   
   11,630.86
   -154.24 (-1.31%)
    


 * RUSSELL 2000
   
   1,809.75
   -13.07 (-0.72%)
    


 * CRUDE OIL
   
   88.82
   +1.95 (+2.24%)
    


 * GOLD
   
   1,721.20
   -1.40 (-0.08%)
    


 * SILVER
   
   18.02
   +0.14 (+0.81%)
    


 * EUR/USD
   
   0.9929
   -0.0021 (-0.2121%)
    


 * 10-YR BOND
   
   3.1930
   -0.0720 (-2.21%)
    


 * GBP/USD
   
   1.1518
   +0.0003 (+0.02%)
    


 * USD/JPY
   
   140.5400
   +0.3880 (+0.28%)
    


 * BTC-USD
   
   19,751.40
   -91.58 (-0.46%)
    


 * CMC CRYPTO 200
   
   473.72
   -5.95 (-1.24%)
    


 * FTSE 100
   
   7,287.43
   +6.24 (+0.09%)
    


 * NIKKEI 225
   
   27,619.61
   -31.23 (-0.11%)
    




The Economist


FIRMS’ UNWISE ADDICTION TO MERGERS AND ACQUISITIONS

Read full article
August 24, 2022·6 min read


The death knell for corporate America’s greatest individual experiment in
mergers and acquisitions sounded in November 2021 when General Electric
announced its intention to split in three. A thousand deals were struck by Jack
Welch, its notoriously gung-ho boss who ran the American industrial and
financial giant between 1981 and 2001, a pace that did not slacken under his
successor, Jeffrey Immelt. The result has been a monumental destruction of
shareholder wealth. The firm’s market value peaked at $594bn in 2000. Today it
is a relatively measly $83bn.

This lesson notwithstanding, bosses just cannot shake the need to shake hands.
In 2021 dealmaking reached fever-pitch: a record $5.9trn-worth were announced
globally, $3.8trn by operating companies and the balance by private-equity funds
and special-purpose acquisition companies. Competition for assets was fierce and
due diligence frenetic. The cost of capital was historically low and buyers paid
top-notch prices, at a record median valuation of 15.4 times earnings before
interest, tax, depreciation and amortisation (ebitda), according to Bain, a
consultancy. The number of deals for highly-valued technology firms soared,
accounting for a quarter of the total volume.



If history is any judge, many of these deals will destroy value. It is easy to
identify disastrous deals: large goodwill write-downs or even bankruptcy are
useful signposts. But measuring the performance of the average deal is tough;
relative share price performance is a quick but noisy measure and asking a
counterfactual “what if” question is crystal-ball stuff. A recent review of
academic literature by Geoff and J. Gay Meeks at Cambridge University, estimates
that only a fifth of studies conclude that the average deal produces higher
combined profits or increases the wealth of the acquirer’s shareholders.
McKinsey, another consultancy, reckons that firms pursuing large deals between
2010 and 2019 had only a coin-flip chance of creating excess shareholder
returns. Enough to put average Joes off dealmaking, but not budding Neutron
Jacks.



Those chances of success are further reduced by the circumstances in which the
latest crop of deals were struck. Times of frenzy, like last year, are
particularly bad for matching suitable buyers and sellers. Dealmaking tends to
snowball as chief executives, keen to expand their dominions (and compensation),
watch others make their moves and are unable to stand idly by while competitors
make hay. Unprecedented competition from private-equity funds only intensifies
the urge to move fast. Compounding their zeal are the middlemen. Investment
bankers, who get paid by the deal rather than by the hour, convince them
anything is possible: flattery is hard currency in the market for advice.

There are few brakes on this train. Where activist investors might agitate on
the sell-side of a transaction for a higher price (often successfully), this
kind of scrutiny is less common on the buy-side. Strong shareholder dissent in
reaction to Unilever’s abortive $66bn bid for gsk’s consumer health-care
division in December 2021 is an all-too-rare example of owners holding
trigger-happy management to account. Today the division, called Haleon, is
listed on the London Stock Exchange, valued at around half of Unilever’s offer.

The result is ambitious deals made at high prices. Lower asset values are
already exposing the flawed logic of some struck at the top of the market. In
August Just Eat Takeaway.com, a European food-delivery firm, announced a
write-down of the value of Grubhub, its distracting American misadventure, by
$3.3bn, barely a year after completing this $7.3bn deal.

As equity markets tumbled this year, the shotgun weddings announced in 2021 were
being consummated. After the thrill of courtship begins the hard task of
post-merger integration. This complex process is the domain of consultants,
organisational charts and budgeting, rather than clandestine negotiations and
punchy projections. It is being turned on its head by a mix of inflation and
slowing growth. Bosses bet big that high prices would be justified by higher
profits. They are now running new businesses in a new world.

Buyers tend to overestimate the operational benefits of lumping two firms
together (“synergies” in corporate speak). Often promised but seldom fully
delivered, these projections persuade bosses that the pin factory is better in
their hands than those of private-equity’s financial wizards. Scale was the idée
fixe of dealmaking during 2021. Such deals are usually predicated on heavy cost
cutting, which is far harder while inflation rages. Add current supply-chain
chaos to yo-yoing input costs, and managers soon find their powers waning.

That difficulty is apparent at Warner Bros Discovery, an American media giant
formed in April 2022 through the merger of Discovery and WarnerMedia. In an
industry among the worst at realising such targets came a promise of $3bn of
annual savings. Rising costs and cyclical pressures on advertising revenue mean
that integration will be more difficult than planned. Expectations for ebitda in
2023 are now $12bn, rather than $14bn when the merger was announced. The
response of David Zaslav, the firm’s boss, has been to tighten the screws even
further (see next article).

Labour is often the first cost bosses turn to, even if heavy layoffs grow the
chance of rifts between new bedfellows. Many of the most spectacular blow-ups
have involved cultural transplant-rejection at the highest levels, though as in
aol and Time Warner’s ill-fated $165bn tie-up in 2001 this is usually a symptom
rather than cause of strategic mismatch. Yet the real risks occur further down
the food-chain as labour markets continue to convulse. The ability to retain
good workers (“talent” in the integration dictionary) is critical. It comes high
on the list of reasons why deals succeed in a recent survey conducted by Bain.

The war for talent has quickly turned into a great hiring freeze in the
technology sector, but elsewhere labour shortages are the norm. Significant
challenges await the integration of Canadian Pacific Railway and Kansas City
Southern, a $31bn deal announced in September 2021 which is awaiting its final
regulatory stamps. The merger in 1968 of Pennsylvania and New York Central
Railroad provides a warning from history. Shortly before the new entity’s
bankruptcy in 1970, an internal report laid bare the role of high staff turnover
in its failed integration: 61% of train masters, 81% of transport
superintendents and 44% of division superintendents had been in their job for
less than a year.

The dealmakers of 2021 entered the present inflationary period with a high bar
to clear in order to justify the top-of-market deals they struck. As of now the
mega-disasters of this wave of mega-deals are matters of speculation, though no
one doubts they will emerge. Even this will not be enough to convince bosses to
kick their dealmaking habit, at least while corporate balance-sheets remain
strong, and activity has been remarkably resilient in 2022. Until bosses can be
persuaded of other uses for their profits, new challenges mean only new types of
deals. At least this year there may be a few bargains to be had.

© 2022 The Economist Newspaper Limited. All rights reserved.

From The Economist, published under licence. The original content can be found
on
https://www.economist.com/business/2022/08/24/firms-unwise-addiction-to-mergers-and-acquisitions

Tip: Try a valid symbol or a specific company name for relevant results



TRENDING

 * 1.
   
   ARGENTINA TO HASTEN RATE HIKE AFTER 'SOY DOLLAR' FX MOVE, SOURCE SAYS
   

 * 2.
   
   CHINA NO LONGER THE 'GOLDEN GOOSE' FOR MOVIE STUDIOS: HOLLYWOOD PRODUCER
   

 * 3.
   
   'WE DON’T HAVE ENOUGH' LITHIUM GLOBALLY TO MEET EV TARGETS, MINING CEO SAYS
   

 * 4.
   
   GAZPROM: OFF-LINE NORD STREAM COMPRESSOR STATION NOW DEEMED HAZARDOUS
   

 * 5.
   
   OIL JUMPS NEAR $90 AFTER OPEC+ SURPRISES WITH TOKEN SUPPLY CUT
   



Advertisement

RECOMMENDED STORIES

 * Reuters
   
   BED BATH & BEYOND CFO PLUNGES TO DEATH AT NEW YORK'S JENGA TOWER
   
   
   (Reuters) -Bed Bath & Beyond Inc's chief financial officer fell to his death
   from New York's Tribeca skyscraper known as the "Jenga" tower on Friday
   afternoon, police said on Sunday, days after the struggling retailer
   announced it was closing stores and laying off workers. Gustavo Arnal, 52,
   joined Bed Bath & Beyond in 2020. Police identified the man as Gustavo Arnal.
   
   1d ago
   
 * MarketWatch
   
   HERE’S WHAT MORGAN STANLEY SAYS WILL FUEL ANOTHER DECLINE IN STOCKS
   
   
   Morgan Stanley strategist Mike Wilson says there's more pain in store, but
   for a different reason.
   
   9h ago
   
 * Investor's Business Daily
   
   DOW JONES FUTURES RISE, OIL PRICES JUMP ON SURPRISE OPEC+ MOVE, RUSSIA NEWS
   
   
   Futures were mixed with the U.S. stock market closed Monday. Oil prices
   jumped as OPEC+ cut production. Russia won't restore European natural gas
   flows.
   
   58m ago
   
 * Fortune
   
   BED BATH & BEYOND CFO ACCUSED OF “PUMP AND DUMP” SCHEME BEFORE FALLING TO HIS
   DEATH FROM NYC SKYSCRAPER
   
   
   The lawsuit claimed CFO Gustavo Arnal was involved in a scheme to
   artificially inflate the company’s value.
   
   21h ago
   
 * TipRanks
   
   ‘THE MARKET BOTTOM IS NEAR,’ SAYS OPPENHEIMER — HERE ARE 2 STOCKS TO PLAY
   THAT BULLISH SENTIMENT
   
   
   In a market trending down, there are fewer scenarios more appealing to
   investors than ones outlining bearish sentiment is about to turn positive.
   And according to Ari Wald, head of technical analysis at Oppenheimer, we’re
   on the cusp of one such turnaround right now. “Our analysis indicates
   September weakness is marking a final leg lower in the bear cycle, and a
   bullish opportunity for long-term investors,” Wald recently explained. “In
   the post-war era, the majority of bear cycles have been long
   
   1d ago
   
 * MoneyWise
   
   AS THE US HOUSING MARKET RETURNS TO SANITY, RESEARCHERS SAY THESE 5 CITIES
   ARE PRIMED FOR DEEP PRICE CUTS
   
   
   Cities that have seen an 'influx of affluence' may see prices sink the
   farthest.
   
   1d ago
   
 * Barrons.com
   
   IS THE STOCK MARKET OPEN TODAY? HERE ARE THE HOURS FOR LABOR DAY 2022.
   
   
   After a bumpy few weeks for the major U.S. indexes, investors may feel Labor
   Day hasn't come soon enough.
   
   15h ago
   
 * Insider Monkey
   
   BILLIONAIRE STANLEY DRUCKENMILLER IS DECREASING STAKES IN THESE 10 STOCKS
   
   
   In this article, we discuss the 10 stocks that billionaire Stanley
   Druckenmiller is decreasing stakes in. If you want to read about some more
   stocks in the Stanley Druckenmiller portfolio, go directly to Billionaire
   Stanley Druckenmiller is Decreasing Stakes in These 5 Stocks. Stanley
   Druckenmiller of Duquesne Capital is famous on Wall Street since his […]
   
   6h ago
   
 * MoneyWise
   
   SMOKING WEED IS NOW MORE POPULAR THAN SMOKING TOBACCO IN THE US — HERE ARE 3
   SIMPLE WAYS TO PROFIT FROM THE BIG GREEN WAVE
   
   
   The industry is still budding.
   
   7h ago
   
 * Insider Monkey
   
   10 BEST VALUE STOCKS TO BUY NOW
   
   
   In this article, we discuss the 10 best value stocks to buy now. If you want
   to read about some more value stocks, go directly to 5 Best Value Stocks to
   Buy Now. It has been a wild ride for investors on Wall Street for more than a
   year. Stocks have experienced extreme polarization since the […]
   
   22h ago
   
 * Motley Fool
   
   WHERE WILL THE BEAR MARKET BOTTOM? HISTORY OFFERS A VERY CLEAR CLUE
   
   
   Two indicators with a successful history of calling bottoms provide a range
   of where the S&P 500 could eventually bounce.
   
   1d ago
   
 * Insider Monkey
   
   10 STOCKS TO BUY ACCORDING TO KEVIN MCCARTHY’S BREAKLINE CAPITAL
   
   
   In this article, we discuss 10 stocks to buy according to Kevin McCarthy’s
   Breakline Capital. If you want to skip our detailed analysis of McCarthy’s
   history, investment philosophy, and hedge fund performance, go directly to 5
   Stocks to Buy According to Kevin McCarthy’s Breakline Capital. Breakline
   Capital is a New York-based hedge fund that was […]
   
   6h ago
   
 * Motley Fool
   
   CAN INVESTORS TRUST THIS DIVIDEND STOCK'S 8.3% YIELD?
   
   
   Take tobacco giant Altria Group (NYSE: MO), for example; the stock offers
   investors a whopping 8.3% yield, but why is Wall Street demanding such a high
   payout for owning shares? Here are three reasons investors can tap into
   Altria's fat dividend with confidence. Since Altria owns Marlboro, the
   country's most popular cigarette brand, you might guess its exposure to this
   decline would mean less revenue.
   
   1d ago
   
 * Zacks
   
   INTEL CORPORATION (INTC) IS A TRENDING STOCK: FACTS TO KNOW BEFORE BETTING ON
   IT
   
   
   Zacks.com users have recently been watching Intel (INTC) quite a bit. Thus,
   it is worth knowing the facts that could determine the stock's prospects.
   
   6h ago
   
 * Motley Fool
   
   NASDAQ BEAR MARKET: 2 TOP GROWTH STOCKS YOU'LL WISH YOU'D BOUGHT ON THE DIP
   
   
   At the moment, the Nasdaq Composite index is down around 28% from the high
   water mark it set last November. Now that we're in what most economists would
   call a bear market you might be thinking about tucking your tail between your
   legs and hiding under a piece of furniture. Remember, every steep market
   decline in history has been wiped away by subsequent bull markets.
   
   9h ago
   
 * Investor's Business Daily
   
   THESE ARE THE 5 BEST STOCKS TO BUY AND WATCH NOW
   
   
   Buying a stock is easy, but buying the right stock without a time-tested
   strategy is incredibly hard. So what are the best stocks to buy now or put on
   a watchlist?
   
   3h ago
   
 * Zacks
   
   CHARGEPOINT HOLDINGS, INC. (CHPT) IS ATTRACTING INVESTOR ATTENTION: HERE IS
   WHAT YOU SHOULD KNOW
   
   
   Recently, Zacks.com users have been paying close attention to ChargePoint
   Holdings, Inc. (CHPT). This makes it worthwhile to examine what the stock has
   in store.
   
   6h ago
   
 * The Wall Street Journal
   
   BED BATH & BEYOND FACES LEADERSHIP GAP AFTER EXECUTIVE’S DEATH
   
   
   A new team will handle finances and the holiday season after the death of CFO
   Gustavo Arnal and departures of other senior executives.
   
   3h ago
   
 * Insider Monkey
   
   10 MOST IMPORTANT TECH LAYOFFS TO WATCH
   
   
   In this article, we discuss 10 most important tech layoffs to watch. If you
   want to see more firms that recently laid off employees, check out 5 Most
   Important Tech Layoffs to Watch. The tech sector hired aggressively up until
   2022, mainly because the demand for technology-led products and services grew
   exorbitantly post pandemic. However, […]
   
   6h ago
   
 * Reuters
   
   EURO PLUNGES TO NEW 20-YEAR LOW AFTER RUSSIAN GAS HALT
   
   
   LONDON (Reuters) -The euro sank below $0.99 to a new 20-year low on Monday
   after Russia's halt to gas supplies down its main pipeline to Europe
   heightened fears about a deepening energy crisis across the region. The euro
   has been increasingly correlated with natural gas prices in recent months,
   with the former falling when prices of the energy source rise. Europe is
   scrambling to wean itself off Russian supplies and build up reserves before
   the cold winter months, but investors reckon the hit to its economy will be
   huge.
   
   17h ago
   
   More Stories

Advertisement
Advertisement



Display Advertisement