GO
Loading...

More M&A Activity on the Horizon?

Monday, 2 May 2011 | 8:05 PM ET
No Huddle Offense
Recent M&A deals confirm Mad Money host Jim Cramer's view that the market as a whole should trade higher.

Given the amount of money companies are willing to pay for acquisitions, Cramer on Monday said the market looks "too darn cheap" and could go much higher. He also thinks the market could soon see additional mergers and acquisitions.

The "Mad Money" host referenced a number of recent acquisitions, including Teva Pharmaceutical Industries' purchase of biopharmaceutical company Cephalon . Cramer thinks the deal will bolster Teva’s drug pipeline, which is perceived to be too dependent on Copaxone, its multiple sclerosis drug.

Meanwhile, Arch Coal said it will acquire International Coal Group for $3.4 billion. Plus, private equity firm PPR has agreed to buy clothing company Volcom and an unknown party or parties is said to have been seeking food company Ralcorp Holdings .

With these deals, the buyers are betting the stock prices will go up when the U.S. economy rebounds, Cramer said. These transactions could also yield more M&A talk and even lead to other deals, as the stock market “is perceived to be cheap by real companies with real money to spend.”

Cramer said these recent transactions make him think the market should trade higher. He added that any weakness caused by big picture macroeconomic data, like the unemployment number due Friday, will be a buying opportunity.

When this story was published, Cramer's charitable trust owned Alcoa.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

  Price   Change %Change
ACI
---
RAH
---
TEVA
---

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.