Big Deals Are Back
It took a decade of speculation before Procter & Gamble Co. pulled off a $52.4 billion deal for Gillette Co. The historic final sale of AT&T Corp. seemed inevitable for the past three years, but appears to be coming to fruition only this week.
The Big Deal is back in a big way. After a merger drought, corporations are confident, flush with cash, and eager to boost their revenues after years of unglamorous cost-cutting. Wall Street is euphoric about all the matchmaking, but it remains to be seen whether companies and their handlers have learned from the failed deals of the late 1990s or not. While many big deals have been announced, dealmakers say companies are proceeding with caution.
For the past three years, big companies have been pushing costs out of their operations, all the while reining in spending on new employees and new technology. This effort has helped build corporate cash hoards. Cash and short-term investments totaled $4.7 trillion on U.S. corporate balance sheets as of two months ago, up from $3.6 trillion in 1999, according to Chicago's Treasury Strategies. But stand-alone companies can squeeze profits from productivity gains for only so long. At some point, they have to consider ways to grow internally -- or swallow new operations and cut their costs, too.
"People are realizing that their own products are not experiencing enough growth," said Ravi Chanmugam , head of Accenture's M&A strategy unit in New York, citing Procter & Gamble as a prime example. Gillette's products are faster growing while P&G's lineup is more mature. "They want a higher growth than they can achieve."
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Enter the Big Deal.
Corporate boards were largely gun-shy about big deals since 2002, fearful of inheriting a hidden accounting imbroglio, nervous about terrorism's effects on the economy, and scared stiff of presiding over a doomed combination such as America Online Inc.'s purchase of Time Warner Inc.
Boards today are far more cautious about the deals they approve, say the Wall Street bankers and lawyers who assist them. Horizontal mergers, which combine similar companies in the same industry, are in. Vertical deals, which stitch more-disparate operations together, remain taboo. But boards realize they can't stand on the sidelines forever. With those big cash piles, a flood of cheap financing, and a tolerant stock market, 2005 stands to be an incredibly active year.
Lawyers at Sullivan & Cromwell are already preparing for a merger boomlet, particularly as European and Asian firms circle each other and U.S. targets. The law firm, which ranked first globally on dollar volume of merger work last year, has added three new partners in London and doubled its partner group in China. The weakness of the U.S. dollar will not in itself create deals, but will help encourage more foreign buyers into the U.S. market, these lawyers say. "Merger activity is largely a function of psychology," says H. Rodgin Cohen, the firm's chairman. "When people feel good about themselves, that tends to drive more deals. People have a degree of confidence about themselves now."
As Mr. Cohen notes, the deal wave is expected to sweep across a range of industries. Utilities, for instance, have kept to their own turf since the collapse of Enron Corp. and the power-trading industry earlier in the decade. They have since cleaned up their balance sheets, and turned their ambitions outward. In December, Exelon Corp. created the nation's largest utility by agreeing to purchase Public Service Enterprise Group Inc. for $12 billion in stock plus the assumption of $14.1 billion in debt. Many industry experts are anticipating more large deals in the utility sector as a generation of aging CEOs retires.
Foreign buyers are eyeing U.S. oil and natural-gas properties to feed their domestic consumption. Consumer-products companies such as Colgate-Palmolive Co. and Unilever may have to respond to the giant company created by P&G and Gillette. Pharmaceutical companies such as AstraZeneca PLC and Schering-Plough Corp. may find their own merger partners as the world drugs business seeks to cut costs and improve research operations. Business-software companies and Internet concerns are also on the target list.
In Europe, private-equity firms, fueled by low interest rates and abundant bank financing, are still driving the bulk of mergers. Two London-based buyout firms, Cinven Group and BC Partners, are leading the biggest deal announced in Europe so far this year, the $5.7 billion acquisition of Amadeus Global Travel Distribution SA, a travel reservation and booking service based in Madrid.
The stocks of companies acquiring other firms during 2003 have generally outperformed the market since a deal was announced. That is in part because of how all-stock deals are being structured. "During the bubble, targets were focused on the [stock] premium they were getting as incentive," said Frank Yeary, Citigroup's merger chief. "This time around you see people willing to do deals at a lower premium, because a seller has confidence that stock deal will hold up better long-term."
Deals today are also being done in a way to achieve results faster than in the last merger wave. "Companies are being put together in a more thoughtful way, not just smushed together," says Mr. Chanmugam of Accenture. One recent innovation is the "clean room," where consultants or others removed from the two merging companies can convene and start to create a strategy for integrating the businesses even before the deal closes.
Of course, it is easy to preach about "smarter deals" in a fallow merger market, because little competition helps keep asset prices down. For now, it looks like companies are keeping their wits, and have yet to fall into their old ways of overpaying and overpromising.
"There's almost a euphoria now about deal activity," says George Bilicic, a senior managing director at Lazard. "Without question the activity has picked up, but some of the transactions that have been announced have been long considered. There's a continued challenge at the board level to conclude that a transaction beats the status quo."
大型并购案重现江湖
在市场断断续续传闻10年之后，宝洁公司(Procter & Gamble Co.)524亿美元收购吉列(Gillette Co.)的交易终于尘埃落定，大白于天下。而美国电话电报公司(AT&T Corp.)昨日被竞争对手收入囊中的历史性事件似乎是三年来势态演变的必然结果。
大型并购交易重新粉墨登场。在并购市场熬过了漫长的冬季之后，一些企业满怀信心、腰缠万贯而来，他们忍受了多年埋头应付削减成本的苦差事，现在开始急切地希望增加收入。华尔街则乐得充当媒人为各方撮合好事儿。不过，有关各方是否已吸取上世纪九十年代末失败的教训，现在还不得而知。尽管已经宣布了数起大额交易，但业界人士说，各家公司在处理合并事宜时都非常谨慎。
过去三年来，大企业一直在努力降低经营成本，尽量节约人员和新技术开支。这些措施帮助企业积累了可观的现金。据芝加哥Treasury Strategies透露，截至两个月前，美国企业资产负债表中结余的现金及短期投资总额高达4.7万亿美元，而1999年时是3.6万亿美元。但独立企业通过提高生产率挤榨更多利润的做法并不能长期奏效。终有一天，他们不得不挖掘内部增长点，为此可能不得不牺牲拓展新业务的机会，努力降低各种成本。
埃森哲(Accenture)并购战略子公司负责人Ravi Chanmugam说，人们认识到，只靠自己的产品难以实现足够的增长，宝洁就是一个最好的例子。吉列的产品增长很快，相比而言，宝洁的产品已经比较成熟，改善空间有限，而它希望能有更大的增长。
从2002年以来，企业董事会对大型并购交易大多闻之色变，会计方面可能隐藏的麻烦，恐怖活动对美国经济的影响都让他们心有余悸。另外，他们也担心在自己手上造成一桩像美国在线(America Online Inc.)收购时代华纳(Time Warner Inc.)那样让人悔之晚矣的并购案。
华尔街的投行人士和并购事务律师们说，企业董事会审核并购计划时慎之又慎。目前，市场比较推崇水平并购，而将垂直并购视为禁忌。但董事会知道，他们不能永远回避这个问题。在手中握有大量现金、低成本融资唾手可得、股市景气尚可的状况下，2005年注定会是一个非常活跃的并购年。
Sullivan & Cromwell的律师们已经准备好迎接一个并购的小高潮了，欧洲和亚洲企业正互送秋波，同时都还觊觎美国的目标，这让他们尤其感到振奋。Sullivan & Cromwell去年经办并购案的涉“案”金额在全球排名第一，目前它在伦敦又新开了三家事务所，在中国的事务所数量也增加了一倍。
美元汇率走低本身并不足以促使企业实施并购，但Sullivan & Cromwell的律师们说，它有助于鼓励更多的外国买家踏足美国市场。Sullivan董事长罗金?科恩(H. Rodgin Cohen)说，并购活动在很大程度上是心理作用的结果。人们自我感觉良好的时候，往往就会有促成更多交易的愿望。而眼下正是人们自信心高涨的时候。
科恩指出，这波并购浪潮将横扫大片工业行业。比如，公用事业公司在前两年安然公司(Enron Corp.)倒闭、电力交易行业垮台后一直循规蹈矩，不肯越雷池半步。但经过一段时间的韬光养晦，他们整顿了资产负债状况，开始筹划雄心勃勃的扩张计划了。
去年12月份，Exelon Corp.同意以价值120亿美元的股票收购Public Service Enterprise Group Inc.，并承担后者141亿美元的负债，由此诞生了美国最大的公用事业公司。许多业内人士预计，随著老一代企业掌门人逐渐退休，公用事业行业将出现更多的大手笔交易。
外国买家正觊觎美国的石油天然气资产，希望能藉此缓解国内的消费需求。
高露洁棕榄(Colgate-Palmolive Co.)和联合利华(Unilever)等日用消费品公司或许将不得不对宝洁和吉列组成的庞大帝国作出反应。
以制药业来说，随著全球各制药公司都在设法削减成本、改善研发，阿斯特拉捷利康(AstraZeneca PLC)和先灵葆雅(Schering-Plough Corp.)或许也会找到自己的并购目标。
商业软件和互联网企业也都在目标名单上。
在欧洲受低利率和银行融资宽松的推动，私人资本运营公司仍是并购的主要推动力。两家总部位于伦敦的收购公司Cinven Group和BC Partners正在发起今年迄今欧洲最大的交易，以57亿美元收购马德里旅行预定服务公司Amadeus Global Travel Distribution SA。
2003年，收购交易一经宣布，收购方的股价走势往往都会强于大盘。这在一定程度上来自完全换股交易的结构特点。“在泡沫时期，目标公司非常关注将获得的（股票）溢价，”花旗集团(Citigroup)的并购主管弗兰克?耶尔瑞(Frank Yeary)表示，“但这次你看到人们愿意支付的溢价降低了，因为出售方相信换股收购的长期效应会更好。”
与上一轮并购浪潮时期相比，如今的并购交易会更早见到效果。“现在企业并购是经过深思熟虑，而不是随意组合的，”埃森哲的Chanmugam表示。最近有一项创新就是“无尘室”，在这里顾问和来自两个合并公司的人可以聚集一堂，在交易达成前就建立整合战略。
当然，在一个不太活跃的市场中宣扬并购要注意效率是比较容易的，因为缺乏压低资产价格的竞争。目前看来，企业还没有失去理智，并没有回到超额支付或过度承诺的老路上去。
“现在人们对并购的态度是欢欣的，”Lazard的高级董事总经理乔治?比利希克(George Bilicic)说，“毫无疑问，并购将升温，但一些已经宣布的交易是经过了长期的考虑。董事会要作出并购优于现状的结论，仍存在挑战。”
