Mergers

There have been a lot of mergers recently, and don't expect the pace to slow down.

• 1/28/05: Proctor & Gamble announces intent to buy Gillette for $57 billion
• 1/10/05: News Corp. announces intent to buy Fox Entertainment Group for $6.8 billion
• 12/16/04: Johnson & Johnson announces intent to buy Guidant Corp. for $25 billion
• 12/15/04: Sprint Corp. announces intent to buy Nextel Communications for $35 billion
• 12/13/04: Oracle Corp. announces intent to buy Peoplesoft Inc. for $10.3 billion
• 11/17/04: Kmart announces intent to buy Sears, Roebuck & Co. for $11 billion

The economy is in a great position to encourage mergers currently. We have low interest rates. Companies have more cash on hand than they have had in years. The dollar has a low valuation, which gives foreign companies incentive to buy American companies.

There were $544 billion of mergers in 2003, and $767 billion of mergers in 2004. I predict that we will exceed all these previous levels and set a new record that will surpass 1987 when there were $887 billion in mergers.