For many companies, at some point in the year they are looking for more growth to be bigger in an effort to control market prices to stabilize their incomes. In 2016 Michael De La Merced writing in the New York Times examined the mergers file. In 2016 deals for $3.55 trillion were announced but 1009 takeovers worth $800 billion were pulled which still accounts for some big mergers during the year. In examining the deals that did not go through, most were about trying to achieve growth of their companies which the company could not generate on its own. The problem was both government regulations (some said no due to antitrust or possible market concentration) and others thought the price should be higher. Some of the bigger deals which did not come to pass include:

Pfizer and Allergan – deal was worth $152 billion and part of the reason was to change its corporate tax home to lower the tax bill. The government changed the rules which did not make changing locations for the tax an advantage and eventually Pfizer walked away.

Honeywell and United Technologies  – deal was worth $90 billion and composed of stock and cash. United Technologies stock price decline and there were disagreements who would be the senior people in the new company. The issue of antitrust was raised but by that time the deal was dead.

Energy Transfer Equity and Williams Co. – deal was worth $ 33 billion. The smaller Energy Transfer wanted to create an energy giant, but oil prices fell and the deal seemed expensive thus Energy Transfer wanted to walk away. Williams fought it in court however Energy Transfer won and walked away.

Halliburton and Baker Hughes – deal was worth $35 billion. The idea was to combine the two companies to fight the number one company and along the way cut costs. The government had other ideas as antitrust was raised, when the oil price dropped the deal fell through.

Mondelez International and Hershey – deal was worth $23 billion. The owner of Cadbury and Nabisco wanted to buy Hershey chocolate. Hershey wanted a higher price and there is a problem with the ownership of Hershey. It is owned by a trust for the benefit of orphans and the question is how can that be changed?

Linking to dividend paying stocks, mergers will continue in 2017 and beyond some will be succeed some will not. On the face of it, there maybe less antitrust concerns from the new administration and it will be tested in the not too distance future. If there is less antitrust concerns expected even bigger activity in the mergers field. The other aspects who which company executives get senior posts and fair value will also continue.

There are more questions than answers, till the next time – to raising questions.