Fallout: The Financial Crisis

Takeovers hot in bad economy

John Dimsdale Oct 16, 2008
HTML EMBED:
COPY
Fallout: The Financial Crisis

Takeovers hot in bad economy

John Dimsdale Oct 16, 2008
HTML EMBED:
COPY

TEXT OF STORY

Scott Jagow: The issue isn’t so much the banks now, but the economy and the threat of global recession. Companies are likely to seek shelter in other companies. Here’s John Dimsdale.


John Dimsdale: Banks are doing it. Airlines are doing it. And pretty soon auto companies might, too. There are plenty of downtrodden companies that are looking like good takeover targets.

Tom Duesterberg: At these kinds of prices, there are lots of opportunities out there.

Tom Duesterberg is the president of Manufacturers Alliance. His industry is in recession, he says, but it has one advantage: strong export earnings from a weak dollar.

Duesterberg: They’re in a better position to do acquisitions. There’s less competition from the financial buyers, the private equity players who depend so much on borrowed money, which has dried up for them.

Some consolidation can be expected in every down economy.

Edward Prescott’s research on business cycles won him the Nobel prize in economics in 2004:

Edward Prescott: There’s going to be some negotiations, some give and take. And sometimes when there’s rougher times, you need fewer firms in an industry.

How many fewer firms depends on how rough the times get.

In Washington, I’m John Dimsdale for Marketplace.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.

Raise a glass to Marketplace!

Just $7/month gets you a limited edition KaiPA pint glass. Plus bragging rights that you support independent journalism.
Donate today to get yours!