M&A in Latest Stages of 5-Year Bull Run: Sonenshine

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July 14 (Bloomberg) -- Marshall Sonenshine, chairman and managing partner at Sonenshine Partners, and Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, examine the company combinations being put together in the current M&A market and how long M&A growth and the current bull market may last. They speak on “Bloomberg Surveillance.”

Chocolate and russell stover, are these deals from 20 years ago?

In some ways, yes.

The tremendous run-up in m&a, at a run rate is that continues at 3.5 $20. comments from the same industry getting together to say, let's have more market share, take some cost out of the more prominent stock.

Why are we seeing almost 1930's combinations versus financial transactions?

You're talking about these of equity and deal, mergers, strategic corporate mergers.

This is the latest stages of a five-year bowl.

The latest or late?


You have companies with very, very solid equities and everybody knows it.

They're using the equity as a currency.

Do you believe this rally integra girl is of interest rates increase?

The big issue here is, i don't think we're year five and a seven-year cycle, but your five and 10 or 12. you don't agree about the phrase "late stages"? i don't. they separate it from what is actually making this happen.

What is making it happen is the weakness in the recovery is going to be the reason why this thing continues to go on.

Why is that?

It will take us longer to get for the next recession and bull markets don't and when they get tired or expensive, but when the next recession arrives and we are way far away from that.

In other words, you're saying companies can't grow organically so they have to grow by going out and buying other companies?

The fact we've only had about 3% or 4% revenue growth of the majority of this and yet you're saying 6% to 8% eps growth means companies are doing whatever they need to to deliver the bottom line, even if they don't have a topline.

That folds into the core issue with mergers and acquisitions, something we saw in davos, because of limited revenue growth or the perception of limited revenue growth, we have to combine.

Is that fair?

You have zero gdp growth and lots of parts of europe right now.

We have a very difficult to interpret gdp growth pattern in this country.

They may be revising about second-quarter growth.

First quarter was -2.9. we're in a low visibility environment.

Without that growth and that headwind or the tailwind behind companies right now, m&a will be propped up equities from cheap money, m&a is now researching on the stock side.

Is a sustainable not to the rest of this year but the next year and the year after that?

Out of the trillion dollar deals, a big portion is the drug sector.

There is some of that.

I agree with jonathan on that point but i don't think anything this good lasts forever.

Some distinctions we can have as we go to citigroup earnings at 8:00 a.m. the markets are terrible.

Thank god there's company news to save the day.

A major takeover this morning in the construction sector.

Acquiring the company for about 4 billion dollars.

They provide support of planning for major engineering projects.

There are to work together here in new york.

The combined company will have more than 95,000 workers.

There's a report japan's softbank agreed to buy wireless carrier t-mobile u.s. this is according to japanese new service.

An analyst says the biggest

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


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