Now, you're sitting there with your DayTimer or your Palm Pilot looking at the calendar and wondering what in the world I'm talking about, perhaps speculating what it was I was doing in the decades preceding the 1980s.
Do not fear, there is some method to this madness. Because if you consider the 1980s as the ultimate go-go decade when wheelin' and dealin' and mergin' and purgin' were truly in their heydays, setting off a procession of similar activity that has lasted right into the first decade of the new century, then maybe, just maybe, it's all finally ended.
What's driving this hypothesis is the one-two punch delivered earlier this summer from the land of mergers and acquisitions. First was the announcement that the biggest deal ever -- bigger than Exxon and Mobil and bigger than Daimler and Chrysler -- the takeover of Honeywell by General Electric, was not a done deal, but a deal that was undone. That was followed only a day or two later by the news that United Airlines had pulled the plug on its takeover bid of US Airways, which would have been the biggest deal in airline history.
Two big deals; two dead deals. And two deals that seemingly had the same reason for failure: lack of -- or anticipated lack of -- regulatory approval. This was something we just haven't been seeing on a regular basis for the past 20 years. Sure, every once in a while some big-shot deal got kicked back, but just about everything got through, for better or for worse.
Combine all of this with the news last week that merger and acquisition activity was off 53 percent worldwide during the first half of 2001 -- even worse, 57 percent in the United States -- and the picture starts to clarify: Maybe the party really is over.
Of course, it's not as simple as that. Just as the perception that the 1980s represented some sort of peak in takeovers is not true -- in fact, mergers and acquisitions over the past two or three years have far outdistanced any other era in both the number and size of the deals -- the idea that this sort of stuff won't happen again is nonsense.
We all know we haven't even begun to see the really, really big deals that are going to redefine the home furnishings industry, on both the supply and retail sides of the trade. Those billion-dollar deals of the past few years will seem quaint and charming in comparison with what's to come.
But it could be that the reckless, irrational and totally ego-driven variety of deals -- these were truly what defined the 1980s -- have seen their day. Maybe we won't see companies buying up other companies just to become bigger companies. Maybe we won't see CEOs doing deals just to put a few more notches in their MontBlancs. And maybe we won't see corporate lenders, be they big, respectable banks or low-life junk-bond brokers, putting up the ever bigger bucks to pay for all of this nonsense.
Already, the deals we are seeing are ones that tend to make more sense, rather than ones that show whose debt is bigger.
It's tough to say for sure when one era ends and another begins. And certainly anything can come back again, as another relic from the 1980s, the Village People, seem to painfully prove every couple of years.
But we could be seeing something important here. And I don't know about you, but in my mind it couldn't have happened soon enough.
Letters to the editor can be sent via e-mail to warren.shoulberg@ fairchildpub.com or via mail to HFN, 7 West 34th Street, New York, NY 10001
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|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Jul 16, 2001|
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