Dec. 9 - Breakingviews columnists discuss Sysco’s $3.5 bln purchase of US Foods and why investors' positive reaction may encourage other M&A deals – at least when the math works.
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This morning Cisco big food services company said its. Buying US do to reverse some of the business. The -- up it and that's the equity its share -- this is separate sought out. So the -- -- went by even more than that amount that is paying for the equity this is it quite often acquire prices go down. This is a little bit of a trend going on is yet it's actually we -- we crunch the numbers last month and it was the best here in the the past about seven years or even that's that's correct he went. In other words -- more purchasers made their stock went up by. I'm more than me more from the palace supersonic happen in a long time. Then -- one of the reasons that happens. Is. Nixon Reggie got a big synergies hear him out if they -- -- -- in this deal that are -- covering the entire equity component doesn't it's you know of the deal. And -- was loving them in the into the fire stock here's up. Over sort like 20% I think there's this New Orleans to chip and we've seen that in several cases on connect buying below earlier this year. Obvious that some health care deals and it's if it's injury is not a catalyst. Two more emanate examiners still globally flat and -- we're seeing so many of the. Do you think that -- these deals there's very good reasons why the market loves. Referenced this when it's huge synergies -- some of the health care deals with and -- gigantic tax savings because in the right company -- to -- And some deals which -- -- mildly value destructive actually been you know greeted some more warmly by the market not to the extent that -- stock has 30% of the stock is up to 2% doesn't doesn't fall 10%. Right now argues at least for you know some harmony in the coming year -- it. Definitely stills -- big synergies you make it could put it as a flip side to that especially unit. Aggressive anti trust in November if these are big players in the business of big market says that does that. Yet every scene this morning Heredia and CEO of Cisco has said there you have it could be some of it may be ready to sell off pieces of if there if there are some antitrust concerns. That's one by one of the forces are moving against this fire -- problem is. Regulars have been tougher have been a lot of deals that have been squashed -- or jurisdictions getting involved. And that has led boards to be more conservative despite these sort of Posner writes and passes Canada there at the bit of a problem for the votes of deals with the biggest value of these images of the once Leslie to attract antitrust attention and you wonder offense they have Liberia private equity on the other -- so that's. A little bit different but in case we have a public Weller. We saw with some good outfielder was a little bit of an uprisings that have wait a minute Blake. Your stock went up more than our premium was worth how does how we not do more of this -- you expect or stock for stock deals this is the case because that's easily around that and right 'cause at least your sharing some of these -- here. If you're getting stopped in your car accident and then. It thanks busily that was definitely a level breaking news for you tomorrow.
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