How to play the merger boom

Investment strategy: How to play the merger boom - at Moneyweek.co.uk - the best of the week's international financial media.

Thank goodness for mergers and acquisitions (M&As). With the momentum behind global recovery slowing and markets seemingly range bound, the global-takeover boom has been the only thing offering us any excitement this year.

High profile deals - such as JP Morgan Chase's $58bn takeover of Bank One, AT&T Wireless's $41bn sale to Cingular Wireless and Morrisons' purchase of Safeway - have received endless column inches, but they're just the tip of the iceberg. According to the FT, the value of worldwide M&A deals reached $861bn (£472m) during the first half, compared with $625bn for the same period last year. The US is seeing its "highest level of activity since the year 2000" and Europe, with deals like Sanofi-Synthelabo's e51bn bid for fellow pharma firm Aventis on the cards, isn't far behind. But is this good news for shareholders? The answer is both yes and no.

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