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A Merger Tuesday?

Posted by: Ben Steverman on May 23, 2008

Big merger-and-acquisition deals are often announced on Mondays because the closed markets on Saturday and Sunday provide a quiet period to wrap up complex deals.

The U.S. stock market is closed on Monday for Memorial Day, and that gives Wall Street investment bankers and corporate lawyers an extra day to put together some big M&A deals.

After today’s reports of preparations for a $46 billion bid for Anheuser-Busch (BUD), I’m interested see how many M&A deals emerge on Tuesday.

Thanks to the credit crunch and the U.S. economic slowdown, the M&A has slowed markedly. But there’s speculation corporations — if not private equity firms — might be again hunting for acquisition targets.

Will we see more cross-border deals, in which foreign companies take advantage of the weak dollar to gobble up U.S. firms at a discount? So far, foreign buyers seem wary of the U.S.’s uncertain economic outlook.

For comparison’s sake, I went back in time to look at the headlines on the Tuesday after Memorial Day 2007. At the time, M&A mania was reaching its peak.
On that Tuesday a year ago: The Royal Bank of Scotland launched a $95.6 billion hostile bid for ABN Amro Holdings. Genzyme Corp. (GENZ) agreed to buy Bioenvision for $345 million. URS Corp. (URS) offered $2.6 billion for Washington Group International. And a partnership, which included Lehman Brothers (LEH) announced a deal to buy Archstone-Smith Trust for $22.2 billion.

That was a busy weekend for Wall Street’s M&A teams. We’ll see if this year comes anywhere close. If it does, stocks could get a nice lift. If it doesn’t, at least New York’s bankers and lawyers got to enjoy their Memorial Day barbecues.

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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