More on mergers and acquisitions
Another perspective on the new wave of mergers and acquisitions is supplied in a Business Week interview with Tom Taulli, author of The Complete M & A Handbook and a consultant in this area. What this interview is basically about what stocks to buy, Taulli's insights into the market point toward the next oligopoly spurt we will witness.
Here's a summary of his relevant points:
- More reasonable valuations (no longer hyped) and low interest rates are fueling a revival of M & A activity.
- In the telecom sector, Taulli sees likely acquisitions of companies that are just starting to turn the corner into profitability.
- In the financial sector he sees more consolidation in the credit card area (he cites the recent Citigroup-Sears deal), brokerage firms (Ameritrade is ripe, and possibly e*Trade) and online lender (e-Loan).
- About drug company mergers, he notes "The big pharma industry is a global industry that lives and dies by blockbuster drugs, and it's extremely difficult for any pharmaceutical companies to develop and commercialize a big blockbuster drug. It's like Hollywood. it's not something that's easy to institutionalize in a company. So it makes sense to pursue an M & A strategy to buy patents and pipeline." (Our point exactly.) He notes that Bristol-Myers-Squibb looks like an attractive buyout target.
- AOL-Time-Warner, he says, "was one of the worst mergers ever." Partly because of the inflated price of AOL and partly because of corporate-culture problems. But he sees the company gradually overcoming its problems.
- He sees smaller Internet companies being cobbled up, especially AskJeeves, FindWhat, and LookSmart, all search companies, the hot new e-commerce sites.
- He looks for lots more mergers in the tech sector as survivor firms look for new capital and the Ciscos, Intels, and Microsofts seek to diversify.
4:59:42 PM 
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