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CNN Live At Daybreak

Merger Mania: You Ain't Seen Nuthin' Yet

Aired February 16, 2004 - 06:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CAROL COSTELLO, CNN ANCHOR: Not much of a leap from, well, the gas pump. We're going to talk about that later, but let's talk about the world of high finance. Comcast is making big news with its bid for media giant Disney, and it's not the only deal brewing.
CNN's Maggie Lake takes a look.

(BEGIN VIDEOTAPE)

MAGGIE LAKE, CNN CORRESPONDENT (voice-over): Mega mergers are back en vogue and Wall Street couldn't be happier. Some, like January's $58 billion deal between Bank One and J.P. Morgan, are marked with smiles and handshakes for the cameras. But others have been less friendly.

France's drug company Aventis is fighting off a hostile bid of more than 40 billion euro from smaller pharmaceutical rival Sanofi. And Comcast grabbed headlines with its enormous, multi-billion dollar bid for one of the world's best-known media companies, Disney.

UNIDENTIFIED FEMALE: My gosh, Nemo is swimming out to sea.

LAKE: Analysts say companies are rushing to link up because market valuations are so compelling.

NICK SARGEN, FT. WASHINGTON INVESTMENT: With their stocks doing better, they have, if you like, more currency to go out and do these acquisitions. So I think that the pattern of acquisitions will continue, but I don't think we're going to see the glory days of the late '90s anytime soon.

LAKE: Another reason companies are pushing ahead with mergers is the political environment in the U.S.

GREG VALLIERE, CHARLES SCHWAB: A month or two months ago, we were all talking about a Bush landslide against Howard Dean. Now the possibility of a Kerry administration is not farfetched. And I think a lot of companies, like Comcast, are deciding privately, let's speed these up, let's get moving, because the regulatory climate is going to be a heck of a lot less favorable if Kerry were to win.

LAKE: Not everyone is in favor of the merger mania. Angry investors point to CNN parent Time Warner's marriage to AOL as an example that bigger isn't always better. Consumer groups are also concerned the creation of mega companies will mean higher prices and less choice for customers. But Wall Street analysts argue the wave of mergers show businesses are willing to spend and take risks again. A change of heart they say bodes well for the broader stock market.

(on camera): With Disney in play, the media sector will be a source of merger speculation. But M&A experts say big deals could also come from the telecom and financial sectors.

Maggie Lake, CNN, New York.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired February 16, 2004 - 06:16   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Not much of a leap from, well, the gas pump. We're going to talk about that later, but let's talk about the world of high finance. Comcast is making big news with its bid for media giant Disney, and it's not the only deal brewing.
CNN's Maggie Lake takes a look.

(BEGIN VIDEOTAPE)

MAGGIE LAKE, CNN CORRESPONDENT (voice-over): Mega mergers are back en vogue and Wall Street couldn't be happier. Some, like January's $58 billion deal between Bank One and J.P. Morgan, are marked with smiles and handshakes for the cameras. But others have been less friendly.

France's drug company Aventis is fighting off a hostile bid of more than 40 billion euro from smaller pharmaceutical rival Sanofi. And Comcast grabbed headlines with its enormous, multi-billion dollar bid for one of the world's best-known media companies, Disney.

UNIDENTIFIED FEMALE: My gosh, Nemo is swimming out to sea.

LAKE: Analysts say companies are rushing to link up because market valuations are so compelling.

NICK SARGEN, FT. WASHINGTON INVESTMENT: With their stocks doing better, they have, if you like, more currency to go out and do these acquisitions. So I think that the pattern of acquisitions will continue, but I don't think we're going to see the glory days of the late '90s anytime soon.

LAKE: Another reason companies are pushing ahead with mergers is the political environment in the U.S.

GREG VALLIERE, CHARLES SCHWAB: A month or two months ago, we were all talking about a Bush landslide against Howard Dean. Now the possibility of a Kerry administration is not farfetched. And I think a lot of companies, like Comcast, are deciding privately, let's speed these up, let's get moving, because the regulatory climate is going to be a heck of a lot less favorable if Kerry were to win.

LAKE: Not everyone is in favor of the merger mania. Angry investors point to CNN parent Time Warner's marriage to AOL as an example that bigger isn't always better. Consumer groups are also concerned the creation of mega companies will mean higher prices and less choice for customers. But Wall Street analysts argue the wave of mergers show businesses are willing to spend and take risks again. A change of heart they say bodes well for the broader stock market.

(on camera): With Disney in play, the media sector will be a source of merger speculation. But M&A experts say big deals could also come from the telecom and financial sectors.

Maggie Lake, CNN, New York.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com