The M&A industry is struggling, now that financial buyers (private-equity shops) can’t snap up companies willy-nilly using cheap debt. On the other hand, if this morning’s news is anything to go buy, friendly strategic deals using equity rather than debt are all the rage: Bunge is buying Corn Products International for $4.4 billion in stock, and garbage company Republic Services is buying Allied Waste Industries for $6.1 billion in stock.
These deals are much less profitable for investment banks than acquisitions which require a lot of financing. But there’s no reason why industry consolidation should always be accompanied by enormous profits on Wall Street. I have no opinion on whether these deals are good or bad. But insofar as they don’t involve paying monster fees to banks and lawyers, they’re probably doing something right.