Friday, July 06, 2007

Mergers & Acquisitions: A Study in Scarlet?

by Ken Houghton

As in red ink, that is.

Just before the Blackstone IPO (which would now be #6), Yahoo! Finance noted this an AP article listing the Top 10 IPOs (in terms of market capitalization) of all time:
1. AT&T Wireless Group, $10.6 billion. IPO Date: April 26, 2000. Underwriter: Goldman Sachs

2. Kraft Foods, $8.7 billion. IPO Date: June 12, 2001. Underwriter: Credit Suisse

3. United Parcel Service, $5.5 billion. IPO Date: Nov. 9, 1999. Underwriter: Morgan Stanley

4. CIT Group, $4.6 billion. IPO Date: July 1, 2002. Underwriter: Goldman Sachs

5. Conoco, $4.4 billion. IPO Date: Oct. 21, 1998. Underwriter: Morgan Stanley

6. Travelers Property Casualty, $3.9 billion. IPO Date: March 21, 2002. Underwriter: Citigroup

7. Goldman Sachs Group, $3.7 billion. IPO Date: May 3, 1999. Underwriter: Goldman Sachs

8. Agere Systems, $3.6 billion. IPO Date: March 27, 2001. Underwriter: Morgan Stanley

9. Charter Communications, $3.2 billion. IPO Date: Nov. 8, 1999. Underwriter: Goldman Sachs

10. Lucent Technologies, $3.0 billion. IPO Date: April 2, 1996. Underwriter: Morgan Stanley

Sources: Renaissance Capital and

The above may be large, but I count three* that are (1) arguably successful and (2) not the result of unwinding all or part of a previous Merger.

Tell me again how M&A is done for economic reasons, the way Gordon Gekko tried to explain it in Wall Street.

*Nos. 3, 4, and 7, the weakest of which—CIT Group—has a market cap about about twice its IPO.

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