Cheapness of Money Finally Driving M&A: Sonenshine

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April 29 (Bloomberg) -- Marshall Sonenshine, chairman at Sonenshine Partners, examines what’s behind the strength of the M&A market and compares the current market to the previous highs of 2007 on Bloomberg Television’s “Bloomberg Surveillance.”

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Marshall, thank you.

He wanted me to come on.

I had one of my associates give me some stuff and i read.

Let me cut to the chase.

Have you ever seen anything like now, and why is it as silly as it is?

Four months into the year and hit a chilean dollars, so a run rate of $3 trillion in global m&a. -- we had a trillion dollars.

M&a was the last market to recover in the financial crisis.

But at a high in 2007 it was four dollars trillion -- $4 trillion.

What is different now?

What's money is cheap.

I think this is the first time since the financial crisis when the cheapness of money is actually part of the reason for growth in m&a. up until now the cheapness of money simply reflected a lack of conviction and belief in the just about anything.

So, m&a being conviction driven, we have to believe in the company in the future -- did not recover like equity did.

As you talk to dealmakers, do you get a sense that they are saying we need to finance while the money is still cheap i get it done while we can?

Yes, but i wanted to get a second point.

It is very important.

And you mentioned, adam, the apple bond.

The last thing apple needs is more cash.

But they're buying back their stock.

Second situation.

But it's important about this particular run-up in m&a is the drug companies.

These are strategically driven.

They are not financial transactions.

These are drug companies merging to cut costs, compete with the generic drugmakers and figure out ways to get more product to market more cheaply.

Within this conversation, what you and i have heard the last days or weeks is there is so much money the private equity boys will jump in here with normal mergers.

No shortage of opportunities.

You talk about conviction on the part of ceos -- is it conviction on the fear?

What -- in the pharmaceutical sector, some is conviction and some is fear.

They are under the own pressure and the need to merge to make it happen.

Private equity is not going to companies -- they have a lot of dry powder.

Can you say janet yellen or by proxy ben bernanke that they are causing this, the fed with distorted policies are allowing bill ackman to team up to go after allergen?

Because they continue a policy of cheap money?

, on -- i personally i'm surprised as a lot of people of wall street art that the era of cheap money has gone on as long as it has.

But i don't think they can of the luxury of worrying too much about that.

They really have to worry about keeping the rebound going because it is tepid.

Marshall sonenshine, we will continue this.

Let's get to company news tuesday.

We start what the fight over this french -- company getting serious.

German companies siemens preparing its own bid.

General electric offer to buy alstom any bid that values the company at $13 billion.

First quarter profit falling at bp.

Earnings were in line with estimates.

Ceo bob dudley -- they have been trying to improve the balance sheet after the oil spill of 2010. disney is boosting investment in its new shanghai amusement park by about 17%. $5.4 billion by the time it opens next year.

This text has been automatically generated. It may not be 100% accurate.


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