It Takes Two to Make a Merger

Discussion
Dec 28, 2004
George Anderson

By George Anderson


The year 2004 may not go down as the most active merger and acquisition year in U.S. retail history but consolidation was clearly on the minds of many as Kmart/Sears, Marshall Field’s/May Department Stores, Jones Apparel/Barney’s, etc., Bi-Lo/Bruno’s all announced big dollar deals.


Many industry watchers are expecting to see more dealing in the year ahead with Toys R Us at the top of the list of retailers anticipated to change hands in 2005.


The M&A activity is spurred by a combination of factors, including companies with a lot of cash on hand, real estate values, weak players and those looking to get bigger so they can compete with Wal-Mart and others.


C. Britt Beemer, chairman of America’s Research Group, said the biggest factor is that: “There are just too many companies with weak messages and they have to get the messages stronger, and they have to be able to compete with the good guys to buy better and sell better.”


Moderator’s Comment: Do you expect to see further retailer
consolidation in 2005? What will be the factors driving the activity? What companies
do you think are more likely to be acquired or do the acquiring?


George Anderson – Moderator

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