The credit crunch is not going away, and as a result, there has been a sharp fall-off in leveraged buyouts (LBOs). Basically, only relatively small LBOs -- between $1 billion to $2 billion -- are getting done.But there is a bright spot: strategic acquisitions. If anything, we are seeing a variety of mega deals in this category. A survey from Dealogic shows that – as of June 25 – there were $597 billion in strategic M&A transactions, only 2% down from last year's total.
Some of the notable deals include: InBev's $49.9 billion play for Anheuser-Busch Cos. (NYSE: BUD), Mars' $23 billion deal for Wm. Wrigley Jr. Co. (NYSE: WWY) and Dow Chemical Co's (NYSE: DOW) $18.8 billion cash purchase of Rohm & Haas Co. (NYSE: ROH). The last two have involved financing from Warren Buffett's Berkshire Hathaway (NYSE: BRK.A).
Why the resilience with strategic deals? Well, there are several key reasons.
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