DoomwatchTM vs. Timesizing®
[Commentary] ©1999-1999 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080

Mergers&Acquisitions - Jun.1-15/99

6/15/99 Wal-Mart buys UK's Asda - Retailer pays $10.8b in push to expand in Europe, Bloomberg News via Boston Globe, p. C2.
...The world's largest retailer yesterday [arranged to acquire] Britain's number three supermarket chain..\..whose large stores and selection of goods closely mirror its own.... It would be the largest acquisition ever of any retailer by a foreign company, said Securities Data.... The purchase is...[Arkansas-based] Walmart's third in Europe in two years.... In December, it bought 74 stores from Germany's Spar Handels AG and the year before added the Wertkauf chain of 21 stores in Germany....
Wal-Mart has more than 2,400 discount stores and Supercenters and 450 Sam's clubs in the United States, and another 726 abroad..\.. Asda's 229 stores are 50% larger than its rivals.... [WalMart] plans to use its inventory tracking and other technology systems in Asda's stores to cut costs....
[And that will mean how many lost jobs?]

6/15 DoubleClick buys Abacus Direct [for $806.5m], Bloomberg via Bos Globe, C2.
...A [New York City-based] Internet-advertising company...which makes technology for placing ads on the Internet..\..agreed to buy [a Colorado-based] market broaden its product line and acquire data on consumer purchasing [and use it] to provide targeted ads on line to consumers most likely to buy certain products..\..
[Just like our old employer, Information Resources Inc (IRI) used to do with TV commercials and in-store promotions.]
Abacus Direct has collected data on 2.4 billion catalog purchases by 88 million households....

6/15 [Boston-based] TA Associates buys Atlanta[-based] Physicians' [Specialty Corp. for $102.8m], Bloomberg via Bos Globe, C11.
...Private equity firm [arranged to acquire a firm specializing] in treating diseases and disorders of the ear, nose, and throat \so it\ can take the physician practice management company private....

6/15 Wave Systems buys NAble [Technologies] for $42.2m, Bloomberg via Bos Globe, C11.
...A leading provider of security for transactions on the Internet [based in Lee, Mass.] said it will buy...a Danvers, Mass.-based...closely held security system developer with a business and financial services base..\ gain its data security "smart-card" technology....

[EXTREME merger commentary - ]
6/15 The case of the legal [et al.] leviathans, by Alan Lupo, Bos Globe, C4.
So many local law firms are merging or planning to merge that...I fear I shall need an attorney [but] will hear on the phone a receptionist with one of those [exhaustingly] cheery voices [take 20 minutes just to name the firm: "Hello, this is] Bingham, Dana, Gould, Brown, Rudnick... ... ... ...."
I think I'm getting ill from all this [so] I hang up and call a doctor. "Hello," says another cheery voice, "you've reached the New England Baptist, Brigham, Women's, Beth Israel, Boston Municipal, Tufts...Mass. General...."
[Shades of Kate Jurow's vision of the future economy - one huge corporation. She goes on to visualize only one very highly paid employee. We add one astronomically, galactically, supercosmically highly paid CEO (so median and average wages are real positive, right?) and everyone else, discouraged jobseekers (so low LOW unemployment, right?), on some kind of dole, disability, homelessness or prison. No taxes, just mega-charity which the CEO occasionally downsizes by BBQing a jailbird for brunch or arranging a "nice war" - sort of the tangent the Romans' circuses evolved along when they failed to design the next generation of aggregate sharing technology.
[This seems to be the new American Dream underlying the current trends in B School teaching, CEO speculation, and the current transitional AmDream of hitting the lottery or suing the deep pocket. The Me Decade of the 1980s wiped out any dim memories we may have had about the importance of centrifuging as well as concentrating wealth, or sharing as well as acquiring, and our future looms like a huge and foul-smelling vulture beyond the Deep Space 9 nightmare of "Past Tense" where the burgeoning marginally employed were walled up in the inner cities and thrown food. Unless, of course, we switch from the bloated and dessicating bandaids of Keynesianism and the straining rhetoric of "job creation" to simply sharing the vanishing work and the concentrating skills with, for example, Timesizing.]

6/11 NVest LP buys...Boston-based Kobrick Funds [for $??] - Under terms of deal, money manager will stay in charge, by Lynnley Browning, Bos Globe, C3.
...NVest beat out First Union...among others in bidding for Kobrick's firm..\.. NVest generally owns 100% of its affiliates but allows them autonomy....
[So, Lynnley, you tell us where Kobrick is based, and also where peripheral firms First Union and Cendant are based, but not where NVest LP is based. Nor how many employees total are involved. Hel-lo-o.]

6/10 [Illinois-based] Allstate buys CNA unit [for $1.2b], Bloomberg via Bos Globe, D2.
...the personal insurance division of CNA Financial part of a strategy to [more than double] its sales of home and auto policies through independent agents...who represent more than one insurer...and make it the thrid-largest in that category, up from ninth..\.. Slowing sales by the 15,500 agents who only sell Allstate policies helped drive the company's stock down about 20% in the last year.
[Allstate should be putting that billion into incentives for its 15,500 exclusive agents, reducing its prices, and improving its advertising. More than that, it should be buying back its own stock, so it can thumb its nose at the short-sighted gold-diggers of Wall Street, and putting a little into stock dividends. Originally, the stock market was long-term and dividends oriented. Now people ignore dividends and just jump around for capital gains, or capital losses if they're selling short. But even stock buyers are short-sighted today, so its selling short and buying short in this institution - Wall St - which is showing its age and starting to outlive its usefulness as a source of flexible loans that you didn't have to repay unless you could afford it.]

6/10 IBM to buy computer maker Whistle Communications [for $undisclosed] - Plans packages aimed at small businesses, by Jeff Bliss, Bloomberg via Bos Globe, D3.
[How ironic. The biggest high-tech company of all now turns away from self-immolating big-business America and places its fatuous hopes on small business, which by some miracle is supposed to be able to make up for the suicidal and short-term strategies of the whole of big business. Every small business wants to be a big business but as soon as it reaches its goal it starts self-destructing with merging and downsizing. Great strategies!]
ARMONK, N.Y. - ...The world's largest computer maker agreed to buy [the California-based, closely held] number one maker of computers that give small companies Internet access and help them set up World Wide Web sites and provide e-mail. IBM will combine services and software with a Whistle machine and sell the package to businesses with fewer than 100 employees. IBM, also the world's biggeset computer-services company, is intent on reaching more small businesses, where sales are rising 15% a year.
[That's because so many people have got downsized out of big business, and now have to use up their savings trying to start small businesses, like us for instance. The main "efficiency" this economy is achieving is ejecting its senior citizens out of retirement - because they have no longer any pension to speak of - and pressuring them into the workforce, same as we did with women in these last two generations since World War II. All of which gives another whole sector of the population less money and less time (= the key to the whole solution) to shop.]
The company...will keep all of Whistle's 75 employees.... Unlike traditional computers, the Whistle machine doesn't let users add or delete software....
["Traditional" - no, the oldest computers were all software-hardwired like this. This is a huge step backward, worse than Apple's fatal, closed-systems architecture mistake.]

6/09 GM [Acceptance Corp.] buys Bank of N.Y. [Financial Corp.] for $1.8b, Bloomberg via Bos Globe, D2.
General Motors Corp.'s finance arm agreed to buy Bank of New York's commercial finance unit....

6/09 American Tower buys 75 sites in Illinois [for $undisclosed], Bloomberg via Bos Globe, D9.
...[The Boston-based operator of] about 3,400 broadcast and wireless communications towers in the U.S. agreed to acquire about 75 communications sites that Sprint is building....

6/09 Needham firm acquires 17 Pa. day-care centers [for $undisclosed], by Heather Kamins, Bos Globe, D9.
Needham-based Mulberry Child Care Centers, Inc. said it will acquire...child-care centers previously owned lby Little People Day Schools.... Mulberry said it will hire Little People's 503 employees and invest more than $250,000 in the...operation....

[Merka kontinyoo self-kaneeboleezayshun - ]
6/08/1999 AlliedSignal to buy Honeywell - Companies to slash 4,500 jobs in $16.3b stock and debt deal, Wash Post via Bos Globe, C2.
...The market leader in flight-safety systems and also a...player in \aircraft parts (engines, brakes...) and repair, and specialty chemicals will buy\ a company that invented the home thermostat but has since expanded [in] electronic and software-driven controls for homes and businesses [and] guidance and control systems for..\.."smart" bombs and aircraft form an aerospace giant.... Both sides made great concessions to pull it off. AlliedSignal won in having the combined company based in Morristown, NJ rather than in Minneapolis - Honeywell's longtime HQ. But the company will bear the Honeywell name [no mention of Honeywell-Bull - only of a bossy cow-boy/butch/hopalong/cassidy...] ..\..Larry Bossidy...the hard-driving head of industrial conglomerate AlliedSignal Inc. wanted to do one more deal before he [retired next year].
[We're telling ya, folks, we gotta get to them when they're still in B school if we're ever gonna stop this kannibalistik, kevorkian and kamekazi kind of management.]
...Bossidy said in an interview the deal completes two of his desires for AlliedSignal: expanding the business and finding a successor.
"This looks to me like AlliedSiginal is moving up the aviation food chain," said James McAleese [an aerospace lawyer]. "It solidifies their control of the cockpit."
[So again, competition suffers.
[Click here for the downsizing aspects.]

[And the reaction of our brain-dead investment class?...]
6/08 Dow up 109.54 on merger news; Nasdaq gains 45.87 - Market again moving toward record heights, AP via Bos Globe, C3.
...Trading got a boost from the announcement of several mergers, particularly a $14.82 [$16.3 in the article above, but what's 1½b to these airheads] billion deal between AlliedSignal and Honeywell...
[Dumb, short-sighted, gullible, ignorant, unhistorical, pollyanna, drugged-up, speculation-oriented, suicidal investors again cheer the self-amputation and cannibalization of the American economy. 1920s déjà vu!
[All we can hope is that the Internet will wise up a few more people this time than the 3-4 individuals who alone knew what was going on in 1929.]

6/07 Zions Bancorp to buy First Security for $5.9 billion - To create nation's 20th-largest bank, by Daniel Dunaief, Bloomberg via Bos Globe, B5.
[For full details, scan down to this date and story on our Banking page.]

[Takeover minus absorption and plus ESOP - ]
6/04 Roche buys last 33% of Genentech for $3.7b, Bloomberg via Bos Globe, E2.
...Europe's 4th-biggest drug maker [based in Switzerland] will buy the [rest] of the biotechnology company [in which they bought their] original 60% 1990....
[Ah, is this a typo for (100%-33.33%=) 66.66 or 67%?]
Continuing as a separate company with publicly traded shares lets Genentech offer stock options to attract and keep top researchers.
[Ahso, employee stock ownership program (ESOP) = silver lining in dark cloud of takeover?]

[Didn't catch this biggy last September so here it is, resurfacing now.]
6/04 SEC OKs $524m charge by Boston Scientific [in its 9/98 purchase of Schneider Worldwide for $2.1b], Dow Jones via Bos Globe, E5.
...One of the biggest makers of angioplasty products said US regulators accepted the...charge it took in connection with its purchase of Schneider...from drug maker Pfizer Inc. in September..\.. The Securities and Exchange Commission [SEC] approved the allocation of [the] $2.1b purchase price for Schneider, including the Q3 charge, which was for research and development [R&D] acquired in the transaction.... The SEC is examining the use of R&D write-offs in mergers and acquisitions to make sure that companies don't exaggerate the value of acquired research to avoid future earnings hits....
[Oh they wouldn't do a nathty thing like that now, would they?]

6/04 Litton [Industries] to buy Avondale [Industries for $576.7m]; Newport News drops bid, Bloomberg via Bos Globe, E2.
...A maker of Navy destroyers and navigation equipment agreed to buy...Avondale, La.-based Avondale \which\ said it would accept Litton's offer [$39.50/share] if Newport News, the only US maker of nuclear aircraft carriers, didn't raise its bid [$35.50/share] within 48 hours.... Litton's separate offer to buy Newport News, made at the same time as the Avondale offer, was rejected by the Defense Dept. last week, which opposed the concentration of military shipbuilding that would have resulted from the combination of all three companies....
[Gotta hand it to the good ol' US Defense Dept. - they do like to preserve the appearance of honesty - in some cases.]

6/03 Peoples Heritage [Financial] in buyout - Maine bank to get Banknorth in $712m stock-for-stock deal, by Lynnley Browning, Bos Globe, D1.
[For details, see the story of this date on our banking page.]

6/03 Sellers sold...GMAC Home Services reaches into Cape Cod..\..buys two of the largest residential real estate firms on Cape Cod [for $undisclosed], Bos Globe, D7.
...A New Jersey subsidiary of GM [has bought] Kinlin Grover Properties of Osterville and Bay Village Realty/Better Homes and Gardens of a deal that closed last week.... Together, the companies control more than 17% of Cape Cod's residential real estate market....
[On goes the 'californicating' of Cape Cod, now nearly one giant strip mall of Taco Bells and Burger Kings. How appropriate it should be invaded by bloated giant GM with a division that sounds like HVAC (heating, ventilating, air conditioning), the generic and artificial atmosphere-control aspect of home and business construction. Let's update the old song - "See a parking lot on Olde Cape Cod...."]

[Blessing or curse?]
6/02 CSX, Norfolk Southern [jointly] take over Conrail routes [for $10.3b] - 23-year government-created monopoly ends, AP via Bos Globe, D3.
ALTOONA, Pa. - [Two private-sector railroads] heralded a new era in railroading yesterday as they broke up a...rail monopoly created [in 1976] by the government as the industry's last hope of survival. The restructuring...came at a time of heightened concerns over safety and service in light of prolonged disruptions that followed the last major rail merger.... Gridlock and delivery delays followed the 1996 merger of Union Pacific Railroad with Southern Pacific in the West and the Midwest. In addition, a string of accidents killed several crew members..\..
The split of Conrail gives Norfolk Southern and CSX, both Virgina based, access to lucrative markets in the Northeast and restores competition for many shippers along former Conrail routes for the first time since 1976...when Congress created Conrail out of six bankrupt carriers.
[So "Conrail" was short for "Congress's Railroad"? - groovy thought. But as for restoring competition, how much competition is there going to be between two private-sector railroads that can cooperate smoothly enough to jointly raise $10b & buy a huge railroad with it? Besides, the following paragraph sounds more like a shared monopoly than an arena of competition - ]
...Norfolk Southern and CSX now control virtually all rail traffic east of the Mississippi River, with tracks stretching nearly 45,000 miles from Montreal to Miami and from Boston to Kansas City, Mo....

6/02 AmSouth Bancorp to buy First American in $5.3b deal - Alabama bank doubles assets [in] Tenn. and Miss., Bloomberg via Bos Globe, D3.
[For full details, scan down to this date and story on our Banking page.]

6/02 AT&T's [Liberty Media Group] buys Associated Group [Inc. for $3b], Bloomberg via Bos Globe, D2.
...The cable-television programming company run by John Malone...who runs Liberty with little interference from AT&T..\..[arranged to buy] Pittsburgh-based Associated \to gain\ a stake in a wireless phone and Internet network to deliver Liberty's services....

6/02/99 AOL buys 2 Internet music companies [Spinner Networks & Nullsoft for $400m], Bloomberg News via Boston Globe, p. D2.
...The [Dulles, Va.-based] world's largest on-line service said it bought [two] closely give customers access to the latest technology for playing and recording music over the Internet. [San Francisco-based] Spinner's Internet radio service has 1.5 million users each month and broadcasts 2 million songs daily over its Web site. [Sedona, Ariz.-based] Nullsoft is a developer of MP3 technology, which lets consumers download compact disc-quality recordings for free.... AOL will merge the operations of the two companies in San Francisco....

For earlier Mergers&Acquisitions, click on the desired date -

  • Apr-May/99
  • Mar/99
  • Feb/99 and before

    For more details, our laypersons' guide to our great economic future Timesizing, Not Downsizing is available at bookstores in Harvard Square, Cambridge, Mass. or from * online.

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