Got a nice bonus this week from the merger of Merck and Schering Plough. I held stocks in both companies and consider Merck as one of my core stocks. As part of the merger, I received $10.50 per share in cash, plus additional shares in the new Merck, for each share of Schering Plough. I've always considered both to be good investments and think the combination of the two will be good going forward.
I always enjoy merger deals of this type, where I get most of my invested cash back. It's like playing with the house's money, since I have practically nothing invested in the stock I received as part of the merger.
The icing on the top of the cake is the great dividend I've gotten from Merck all along. Even if they reduced the dividend 50% due to costs related to the merger, I'd still be happy with the return on investment. But I doubt that's likely to happen.
Showing posts with label mergers and aquisitions. Show all posts
Showing posts with label mergers and aquisitions. Show all posts
Sunday, November 8, 2009
Monday, September 28, 2009
Great Start For the Week!
Wall Street wasted little time in recovering from its worst week in two months as the Dow climbed more than 130 points Monday afternoon amid a flurry of M&A action. The markets were taking their cues from the merger news as Xerox (XRX: 7.2799, -1.7501, -19.38%) inked a $6.4 billion deal to buy Affiliated Computer Services (ACS: 52.41, 5.17, 10.94%), Abbott Labs (ABT: 48.681, 1.341, 2.83%) bought a drug business for $6.6 billion and Johnson & Johnson (JNJ: 61.305, 0.645, 1.06%) acquired a $444 million stake in biotech company Crucell (CRXL: 22.35, -1.35, -5.7%).
The Dow was led higher by DuPont (DD: 32.6383, 0.8683, 2.73%), General Electric (GE: 16.7949, 0.3949, 2.41%) and Cisco (CSCO: 23.7104, 1.0904, 4.82%). All 30 blue-chip stocks were in the green but financial-related stocks like American Express (AXP: 34.04, 0.96, 2.9%) and Bank of America (BAC: 16.9194, 0.2694, 1.62%) saw more modest gains.
The early bullishness on Wall Street comes after the markets closed lower on Friday, marking the first three-day slide for stocks since early September. After a relatively resilient month, the markets have run into resistance in recent days amid disappointing economic reports that have led some to question the bulls' economic optimism. In fact, last week marked Wall Street's steepest pullback since early July as the Dow lost 155 points and the S&P 500 slid 2.24%. Still, the Dow is up 1.78% in September and more than 10% year-to-date. But the markets are well on their way to making up most of those losses as traders cheer the M&A activity, which until recently had all but dried up. The increased M&A activity has some traders thinking, “Well maybe there is indeed some value here and the growth prospects are a little bit better,” said Nick Kalivas, vice president of financial research at MF Global. “I think people have taken the secondary issuance as a sign that stocks have poor valuation. I think these M&A deals neutralizes that argument."
We'll see how things hold up for the rest of the week.
The Dow was led higher by DuPont (DD: 32.6383, 0.8683, 2.73%), General Electric (GE: 16.7949, 0.3949, 2.41%) and Cisco (CSCO: 23.7104, 1.0904, 4.82%). All 30 blue-chip stocks were in the green but financial-related stocks like American Express (AXP: 34.04, 0.96, 2.9%) and Bank of America (BAC: 16.9194, 0.2694, 1.62%) saw more modest gains.
The early bullishness on Wall Street comes after the markets closed lower on Friday, marking the first three-day slide for stocks since early September. After a relatively resilient month, the markets have run into resistance in recent days amid disappointing economic reports that have led some to question the bulls' economic optimism. In fact, last week marked Wall Street's steepest pullback since early July as the Dow lost 155 points and the S&P 500 slid 2.24%. Still, the Dow is up 1.78% in September and more than 10% year-to-date. But the markets are well on their way to making up most of those losses as traders cheer the M&A activity, which until recently had all but dried up. The increased M&A activity has some traders thinking, “Well maybe there is indeed some value here and the growth prospects are a little bit better,” said Nick Kalivas, vice president of financial research at MF Global. “I think people have taken the secondary issuance as a sign that stocks have poor valuation. I think these M&A deals neutralizes that argument."
We'll see how things hold up for the rest of the week.
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