The recent spate of high-profile deals on Wall Street have brought back memories of Gordon Gekko and the go-go ’80s. In the 1980s, RJR Nabisco, Beatrice Foods, Time Warner and other deals grabbed headlines and brought notoriety and riches to firms like Drexel Burham Lambert and Kohlberg Kravis Roberts & Co., and individuals like Michael Milken, Henry Kravis, Carl Ichan and T. Boone Pickens. With the, at the time, unheard of sums of cash making these deals work, came allegations — and eventually convictions — of insider trading against some of these ’80s titans of Wall Street, including Milken and Ivan Boesky.
Within the last two years, the merger-and-acquisition world has reheated to temperatures even beyond those attained during the 1980s. News Corp.’s recent $5 billion bid for Dow Jones and Alcoa Inc.’s recent $27 billion bid for Canadian aluminum rival Alcan are but two examples of the takeover frenzy being played out (again) on Wall Street. In 2006, corporate acquisition and private equity deals cut a wide swath across several industries. For example, Wachovia acquired Golden West Financial for $27 billion, Bayer AG acquired Schering AG for $21.5 billion and Anadarko Petroleum acquired Kerr-McGee for $18 billion. In addition, private equity firms like Kohlberg Kravis Roberts and Texas Pacific Group have been major players, reflected by their $45 billion bid to buy energy producer TXU Corp.
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