FedEx deal is just the beginning of a big trend
Finally! Jim Cramer is overjoyed that someone knocked some sense into CEOs in the U.S. They're starting to realize what great benefits there are to a strong dollar and are taking action.
One example of a CEO taking action was when FedEx CEO Fred Smith took the bull by the horns and made the decision to acquire Dutch freight forwarding company TNT Express for $4.8 billion.
"This transformative deal encapsulates all of the good happening right now that is neither celebrated nor even talked about," the "Mad Money" host said.
UPS tried to takeover TNT for $7 billion two years ago, but the deal was blocked by European regulators. Ultimately it was decided that there would be extensive overlap, which could lead to firing of employees and reduction of competition.
The good news for FedEx is that not only did it manage to pay just a fraction of the price that UPS was going to pay for TNT, but there is practically no overlap in this deal. Additionally, more jobs are expected to be created as a result of the acquisition as FedEx now has the opportunity to expand its presence in Europe.
This deal was done at the perfect time, when Europe is finally on an upswing. Energy costs have also dropped dramatically, which have also impacted Europe in a positive way and also helps FedEx's bottom line. It's positive all around!
Cramer also thinks it is safe to say that if Smith had anticipated that the euro would fall any further from where it is now, he would have waited to acquire TNT. Essentially, he recognizes that this is a once in a blue moon opportunity.
By making a move now Smith is recognizing that the dollar is not going to stay at these levels forever, and it's not worth taking a chance in case the euro rebounds in the future.
From Cramer's perspective, it is as if no one is recognizing the upside to a strong dollar lately. There are lots of upsides!
Yes, a strong dollar does make it harder for U.S. companies to compete overseas. But it also means that U.S. companies can get more bang for their buck if they took an opportunistic approach and made overseas acquisitions.
"With so many cheap opportunities over there thanks to the favorable exchange rate, I have to wonder if our companies can afford not to take action," Cramer added.
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So this FedEx deal is not just a random one-off transaction. Cramer thinks this is just the beginning of a trend, and he thinks there are dozens of other CEOs that have been waiting on the sidelines waiting for the all clear signal before making a move.
FedEx is the signal.
"That's what they got today, a signal, a benchmark, an acquisition that isn't motivated by inversions but by profit, and it opens the doors for everyone else to make a move."
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