Nov 16, 2009 - 12:52 PM EST
ETF Database submits:Over the past few weeks, there has been a resurgence in acquisition activity, fueling an already strong market rally. This news has spanned all regions of the economy ranging from the transportation sector (Burlington Northern (BNI) being taken over by Berkshire Hathaway (BRK.A)) to pharmaceuticals (Schering Plough (SGP) being acquired by Merck (MRK)). Most recently, in the consumer sector, Kraft (KFT) announced its intention to take over confectionery giant Cadbury (CBY) while Hewlett Packard (HPQ) announced plans to buy 3com (COMS).
While the deals almost always push up the stock price of the company being acquired, the M&A activity is a welcome development for the investment banking industry, which is still suffering from the hangover of the financial crisis of 2008 and 2008. Investment banks have received nearly $4 billion in revenue from these transactions in 2009, and should this consolidation trend continue, it could be very good news for the entire financial sector.
Source: Seeking Alpha (Nov 16, 2009 - 12:52 PM EST)
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