Analysts think picking the mergers and acquisitions door may be the best strategy for many companies
Tuesday, October 28, 2008
BY JOSEPH R. PERONE
Newhouse News Service
Stocks have been hammered as a result of the global financial crisis, and companies in various industries face an uncertain future.
"A lot of businesses were running paycheck to paycheck just like some households," said Roger Aguinaldo, chief executive and publisher of the M&A Advisor, a New York-based information publisher for middle-market mergers and acquisitions.
The solution won't be a walk in the park. But it might require a walk down the aisle.
Mergers and acquisitions might be the best chance of survival for some companies, according to experts who follow M&A activity.
"Some of the areas in distress include financials and banking, which are ripe for consolidation, as well as the auto industry and consumer products," said David Stone, head of the corporate and securities practice at Neal Gerber Eisenberg, a Chicago-based law firm.
The Star-Ledger asked several experts in the acquisition business to predict which companies most likely will face a shotgun wedding:
Troubled Chrysler is in talks with both Nissan and General Motors about a possible tie-up, according to published reports.
"There is a 50-50 chance General Motors will acquire Chrysler," said David Thomas, senior editor for Cars.com, a Chicago consumer website. "You would be getting rid of one set of executives and white-collar workers, and you would have more leverage with the United Automobile Workers."
Nissan might want to buy Chrysler's Dodge truck line, he said, because the Dodge Ram will be the basis for the next Nissan Titan full-size pickup.
There has also been speculation Ford might sell Volvo. French carmakers Renault and Peugeot or BMW of Germany would be likely buyers, Thomas said.