Monday, February 07, 2005

Who makes out with M&A?

An article in the Sunday WSJ puzzled over how best to take advantage of the biggest M&A wave since the late 90's. It's very logical conclusion was to buy the investment banks like Goldman Sachs, who get a nice slice of the pie to negotiate these deals. This seems like sage advice after reading Nomi Prins book Other Peoples Money, The Corporate Mugging of America. Prins, a former Managing Director at GS provides a very detailed account of how the investment bankers facilitated many of the pump and deals done in the late 90's where the bankers and company executives got rich at the ultimate expense of investors. It provides eye-opening details about how greed and self-interest dominated an inbred association of bankers, corporations and government regulators and that gave us Enron, Worldcom etc etc etc. Her general warning is that the resulting corporate and regulatory reform has not gone nearly far enough. "Regulatory agencies continue to bless mergers without proper examination of how consolidated balance sheets impact financial transparency, how combined companies eliminate jobs and how the public is not served by fewer companies controlling vital consumer choice". After reading this you can't help but wonder...?

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