M&A: Signs of Strength?
It's not quite merger Monday but we saw another fresh wave of mergers and acquisitions activity on Wall Street today.
This morning, Warren Buffett announced Berkshire Hathaway's deal to acquire Burlington Northern Santa Fe as a bet on the economy. While after the close yesterday, Stanley Works detailed its plans to purchase Black and Decker .
According to Rich Peterson of Standard & Poor's, volume for the first three days of November already exceeded October's statistics and that's on track to outpace the combined September-October volume and could possibly rank as the second busiest month this year in terms of proceeds!With a transaction value of $34 billion, Peterson has Berkshire Hathaway's purchase of Burlington Northern ranked as the third largest M&A deal this year.
In the 4pm hour of Closing Bell, we'll discuss whether this fresh wave of activity is a sign of strength for M&A. Frank Aquila, Partner of Mergers and Acquisitions at Sullivan & Cromwell expects more strategic deals, with S&P 500 companies sitting on roughly $7 billion in cash. Aquila will focus in on distressed M&A space and the return of private equity.
Breaking it down across the sectors, Fred Lane, Vice Chairman of Investment Banking at Raymond James expects consolidation to continue in financial services and consumer products. While health care is typically an area of robust activity, Lane says that uncertainty around the health care plan is going to hurt M&A activity. Lane also says that the weak dollar is a positive, and expects that to drive foreign acquisition activity.
We'll continue to keep a close eye on M&A activity on Closing Bell with Maria Bartiromo.
Liza Tan contributed to this article.
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