In a tough economy, even seemingly unassailable big names aren't immune from takeovers. Recession can spawn a merger mania, and some very large players may soon find themselves under new management. While we, the consumer, may not notice the difference, there's always the chance that we'll find ourselves contending with new corporate names and logos, for the new era.
Fordswagen?
Vulnerable: Ford
Potential Buyer: VolkswagenInside
Story: Ford's stock is low, and high gas prices hurt sales of its most-successful products, trucks and SUVs. VW, on the other hand, expects to sell 8 million vehicles this year, and says it can triple US sales in 10 years.
McWendy's?
Vulnerable: Wendy's
Potential Buyer: McDonald's or Burger King
Inside Story: Wendy's is doing fine, but that may not be enough in the hugely-competitive fast food market, where rising food prices may dig into its modest profits. Longtime rivals could be in a position to gobble up a struggling Wendy's.
Sears-Mart?
Vulnerable: Sears Holdings
Potential Buyer: Wal-Mart
Inside Story: Sears' 2005 merger with K-Mart was disastrous, promoting falling earnings and squandering cash. If stock falls much more, a buyout by relatively wealthy Wal-Mart (or Target) would consolidate the battle for America's retail dollar.
Nvidiamd?
Vulnerable: Advanced Micro Devices
Potential Buyer: Nvidia
Inside Story: Poor decision-making and bad acquisitions keep AMD trailing its only significant rival in the server/PC computer chip market, Intel. Graphics chip company Nvidia, by acquiring AMD, could become large enough to challenge their own rival, Intel.
Wells Wamu?
Vulnerable: Washington Mutual
Potential Buyer: Wells Fargo
Inside Story: The mortgage crisis has hit financial firm WaMu hard, and the worst may be yet to come. Wells Fargo, unlike most large banks, has holdings that are resistant to the housing downturn, and may come to the rescue.
JP Morgan Citi?
Vulnerable: Citigroup
Potential Buyer: JP Morgan Chase
Inside Story: Some say Citigroup is too big to fail. While outright collapse is unlikely, falling shares may make it vulnerable to being bought-out by a better-managed money center. JP Morgan Chase may well be that buyer.
Time Warner Charter?
Vulnerable: Charter Communications
Potential Buyer: Time Warner Cable
Inside Story: Plummeting stock and a mountain of debt make Charter a weak player indeed in the telecom and cable sector. Time Warner Cable is in the process of breaking from the parent corporation, and may have the chance to raise purchase capital.
Schwab*Trade?
Vulnerable: E*Trade
Potential Buyer: Charles Schwab, Ameritrade
Inside Story: E*Trade's discount brokerage business is healthy, but weighed down by its mortgage-related holdings. A sale to healther companies Schwab or TDAmeritrade could happen if the housing market goes further south.
Verizoqwest?
Vulnerable: Qwest
Potential Buyer: Verizon
Inside Story: Qwest is by far the weakest of the independent phone companies created by the break-up of Ma Bell in 1974, has lost half its stock value in the last year, and has no cellular or internet operation of its own. Verizon has both, and its stock is stable.
Johnson & Boston?
Vulnerable: Boston Scientific
Potential Buyer: Johnson & Johnson
Inside Story: Boston Scientific ruined itself purchasing medical device company Guidant, following a bidding war with Johnson & Johnson. Now they may be forced to sell Guidant back to their rival, or, in a worst-case scenario, be bought out entirely themselves.
Akalevel(3)?
Vulnerable: Level 3
Potential Buyer: Akamai
Inside Story: Level 3 has a great broadband network and huge debt. Akamai is profitable and could benefit from a network to promote the content it provides. A merger could be a perfect match for both.
Thursday, April 3, 2008
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