TEXT OF INTERVIEW
BILL RADKE: Let’s say good morning to senior U.S. economist Julia Coronado at BNP Paribas. She joins us every Monday from New York. Hello Julia.
JULIA CORONADO: Good morning.
RADKE: So, I mentioned Intel’s buying part of the German chip maker, the French takeover offer for Genzyme. Also, 3M is buying a company known for fingerprint identification. Julia, we’ve all heard about deals that don’t work. What makes a good merger or acquisition?
CORONADO: Well, right now, in the environment we’re in — it’s an extremely competitive environment with the economy recovering at a pretty lackluster pace. So companies are really focused on gaining market share, maintaining market share, looking for the areas that will be growth areas in the future. Hopefully that bodes well for the wave of mergers and acquisitions we’re in. That contrasts with mergers and acquisitions that we see in boom times, where sometimes people just extrapolate those boom times forward and expect much more than is realistic from a merger. So hopefully this much more conservative approach will bode well for these deals.
RADKE: And finally, Julia, the government said this morning both personal income and spending were up a little bit in July. Is that a hopeful sign?
CORONADO: I wouldn’t say it’s terribly hopeful. I think what the report reinforces is the dynamic we’ve been in, which is consumers are spending. But they’re spending very conservatively. They’re still saving at a very high rate. They’re allocating their dollars very cautiously. So it sort of confirms what we’ve been in, which is slow growth. So it’s not that hopeful in the sense that we’re not seeing spending that’s strong enough to give businesses the confidence to run out and hire a whole new wave of workers.
RADKE: OK. Oh well. Senior U.S. economist Julia Coronado at BNP Paribas, thanks a lot.
CORONADO: My pleasure.