LAT: Corporate Optimism Sparks Wave of Deals

[DeepModem Mom]

Corporate Optimism Sparks Wave of Deals
Cash hoards and higher stock prices make firms more willing to take risks on takeovers.

By Tom Petruno and Josh Friedman, Times Staff Writers


A corporate takeover spree is signaling a new aggressiveness on the part of U.S. executives, who suddenly appear less concerned about the economy or about making strategic missteps....

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The latest wave of takeovers, and expectations of more to come in 2005, helped to push a key index of blue-chip stocks to a three-year high on Monday. But as corporate deal making ramps up, so do worries that business consolidation will mean more lost jobs in an economy still struggling to generate healthy employment growth.

Experts say a confluence of factors is driving the surge in deals. Many firms are flush with cash after deep cost cutting in 2001 and 2002 helped profits soar. Rebounding share prices since 2002 also have given companies more spending money in the form of their own stock....

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More important is that many corporate managers are gaining confidence in the economy and in the prospects for their businesses, say investment bankers, lawyers and others who advise executives. President Bush's reelection, widely supported by business leaders, boosted that sentiment, they say....


http://www.latimes.com/business/la-fi-buyouts14dec14,0,5311837.story?coll=la-home-headlines