Posted by: Armel | July 15, 2008

U.S.A for SALE !!!

                     

When I posted the original article more than a month ago, I somewhat predicted that SPRINT NEXTEL was next to be acquired by a foreign entity with a lesser market cap, possibly from an Emerging Country. Today there is talk of South Korea Telecom (SK Telecom) is about to buy Sprint Nextel.

Below is my previous post on the issue of U.S companies that are now too vulnerable to Europeans, Asian, African corporations with more cash and valuation due to a weak dollar.

From 06/13/08

THE DOLLAR IS WEAK, US INVESTMENT BANKS ARE EXPOSED, OIL PRICES ARE CATCHING UP, IT’S TOUGH TO BE AN WHOLLY OWNED AMERICAN COMPANY LATELY

Nobody saw this coming, not even the best hedge funds could have anticipated this, but it is really happening: European, Chinese, African, Middle Eastern, South American companies are all embarked on a buying spree of American assets. Whether it’s by providing straight cash to fill liquidity gaps, or using trade balances to purchase US bonds, the take over is in full effect !

Earlier this week when InBev a Brazilian brewer ( Brussels Headquartered) made a bid to purchase the largest beer brewer Anheuser-Busch (budweiser).But budweiser is an American Icon and that offer made a lot of noise in Washington DC. InBev is now an “enemy” of conservatives American think-tank lobbyists who threaten to petition and have the government block the deal. The Governor of the Hometown State of Anheuser Busch is looking to use executive powers to keep Budweiser American owned.

A couple of weeks ago, I posted about the MTN deal with the Airtel Indian group. After looking at the balance sheets of the African Company, M&A specialists backed an opposite offer from MTN to Bharti (indian Cellular operator). Now MTNis the buyer and if one follows closely the situation, it won’t be a surprise if MTN next turn their eyes on American telecom companies. SPRINT for example has lost so much value that its fair to say shareholders would be interested in an offer if the price is right.

The Dubai port Deal was shut down not because it didn’t make sense financially but because it had too much political fallout. Even the President intervene to calm his own party, they still said Hell to the No !! But Oil producing gulf states are sitting on too much money and I knew it wouldn’t be long before they purchased another American Staples. Sure enough, The Abu Dhabi Fund bought a stake in the Chrysler BuildingWe now learned that Italians purchased another Manhattan landmark: The Flat Iron Building. Valter Mainetti is the new owner of a majority stake. As if that wasn’t enough, Lehman Brothers disclosed that were about to receive a new capital injection from the Gulf States ! Let’s not forget the previous cash injections from Abu Dhabi into Citi bank.

The money and the debt leverage is just not there in the US anymore to fund Large acquisitions and control merger talks across the globe.

 Armel NJeunou

S/ce: FT, NYT,YAHOO, TIMES, WSJ

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: