Case 11 After Heinz and Dell, a Merger Boom Fails to Appear
By David Welch, Aaron Kirchfeld, and Matthew Monks on March 28, 2013 http://www.businessweek.com/articles/2013-03-28/after-heinz-and-dell-a-merger-boom-fails-to-appear [pic]
Photograph by Anthony Bradshaw

Two big deals announced in February—Berkshire Hathaway’s (BRK/A) $23 billion takeover of Heinz and the proposed $24.4 billion buyout of Dell (DELL)—prompted speculation that a new wave of megamergers and buyouts was finally under way after a five-year drought. What’s happened since? Very little. The value of announced global mergers in March was about $100 billion through the 27th, on track for the lowest monthly total since July 2009.
Some on Wall Street say the Heinz and Dell deals were special situations that didn’t signal the start of a trend. Warren Buffett strikes when he sees an opportunity, and he can go for long stretches without making a major purchase. With Dell, the bidding was initiated by the company’s founder, who still controls 15.6 percent of the shares. Dell has also gotten bids from Blackstone Group (BX) and Carl Icahn. The two deals “may be unique to this quarter,” says Michael Carr, head of mergers and acquisitions for the Americas at Goldman Sachs (GS).
At other companies, concern about U.S. government spending cuts, leadership changes in China, and persistent sovereign debt problems in Europe are weighing on executive confidence and inhibiting deals, according to Mark Shafir, co-head of global M&A at Citigroup (C). “We are not getting the feeling we are in a sustained upturn,” he says. “March is a bit disconcerting.”
Even so, many dealmakers on Wall Street are still hoping for a rebound. With global corporations sitting on more than $4 trillion in cash, and equity markets at an almost five-year high, more companies are weighing acquisitions. Broad economic conditions create “a