The Deal Economy's Great Power Shift

This doesn't happen very often: TPG Capital, the leveraged buyout firm started by David Bonderman, chased two acquisitions only to see them bought by cash-rich companies. TPG bid about £490 million ($806 million) for London-based shoe designer Jimmy Choo, according to two people with knowledge of the matter. Labelux Group, the owner of Bally footwear, won the auction on May 22 by paying about 12 percent more and offering a stake to Tamara Mellon, Jimmy Choo's co-founder, and other senior managers, say the people, who declined to be identified because the talks were private. Three days earlier, Tokyo-based Toshiba acquired Landis+Gyr, a Swiss electronic-metering company TPG was also vying to buy, for $2.3 billion, two people with knowledge of the transaction say.

After rebuilding cash reserves, companies are resuming acquisitions and competing against private equity firms for the same assets. Worldwide, companies with market values of at least $2 billion had cash and cash equivalents of $8.6 trillion in their latest reported full year, 21 percent more than the year before, according to data compiled by Bloomberg. "Corporations are now competing more aggressively with buyout firms," says Matthew Grinnell, head of a team at Barclays Capital (BCS) that advises LBO firms. "A lot of the cash on corporate balance sheets is finding its way into acquisitions."