We've been talking to Sullivan & Cromwell LLP's Frank Aquila lately about buying assets out of bankruptcy. You can check out his column in The Deal magazine
here, and we'll have a video interview posting soon. But Aquila hit on another topic of interest to our readers over at BusinessWeek Monday in a column titled
"M&A: A Smart Strategy in a Down Economy." As the headline implies, Aquila argues that now is the time to buy and "that the winners and losers for the next decade will be determined over the next six to nine months." He offers examples of past downturn acquisitions that have proved transformational, including Diageo plc's (NYSE:DEO) purchase of Seagram Wine & Spirits and Danaher Corp.'s (NYSE:DHR) acquisitions of Marconi's Commerce Systems and Videojet Technologies Inc. units. Both deals closed during the 2001 recession.
Many strategic acquirers seem to agree with Aquila. They include
Cisco Systems Inc. (NASDAQ:CSCO), a serial acquirer that hasn't slowed its pace, and certainly healthcare companies like
Pfizer Inc. (NYSE:PFE) and Sanofi-Aventis SA (NYSE:SNY) have been active.
Still, as
we've noted previously, even for cash-rich strategics, fear of the unknown in such a volatile economy is a huge obstacle to dealmaking, and will likely keep many buyers on the sidelines for the foreseeable future.
- Suzanne Stevens
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