Shareholders Reward Deal-Makers, According to Report
Companies that bought or sold at least five major businesses between 2011 and 2015 saw their shares significantly outperform peers that were less transaction-oriented, according to a 2016 report from the Boston Consulting Group.
Companies that bought or sold at least five major businesses between 2011 and 2015 saw their shares significantly outperform peers that were less transaction-oriented, according to a 2016 report from the Boston Consulting Group.
The active dealmakers delivered an annualized rate of return of 10.5 percent during that period, compared to 5.3 percent for companies that did only one deal, according to the analysis, “The 2016 M&A Report: Masters of the Corporate Portfolio.”
Quoting one of the study’s authors, Timo Schmid, the Wall Street Journal indicated that the deal-makers’ outperformance “likely reflects factors such as tepid economic growth.”
One example in the study was Cisco Systems Inc. The global maker of switches and routers for the internet bought 17 businesses from 2011 to 2015 and sold one. Its return over that period was an annualized 8.7 percent.
