Thread: M&A Losers in $10 TRILLION Deal Binge Led by McClatchy

M&A Losers in $10 Trillion Deal Binge Led by McClatchy, Sprint

By Zachary R. Mider -
Aug 12, 2010 9:01 PM PT

More than half of the 100 biggest takeovers made during the last mergers-and-acquisitions boom have something in common: By one measure, they never should have happened.

The stocks of 53 companies that made the biggest purchases from 2005 to 2008 lagged behind industry peers two years later, according to data compiled by Bloomberg’s ranking group. Among the worst performers were McClatchy Co., Boston Scientific Corp., and Sprint Nextel Corp., all three of which are now valued at less than the price they paid for their acquisitions.

Companies struck $10 trillion of deals during the last merger binge, even after more than a decade of research showing deals often don’t pay off for the buyers. The average stock price of all the top acquirers trailed benchmark indexes by an average of about 3 percentage points.

“As a CEO, you are forced to think about growth, think about outperforming others, building the biggest and most dominant corporation in your sector, and you will do deals,â€

$10 Trillion. Now we're talking REAL money.