Video Analysis From Hoover's Editors
Lending
Cerberus Capital Management
Buying up one of the Big Three U.S. automotive companies sure will get a company noticed, won't it? Cerberus has been splashed across the country's front pages after taking the once and future Chrysler (currently DaimlerChrysler Corporation but soon to become just plain Chrysler Corp. again) off the hands of DaimlerChrysler AG. But the private investment firm is certainly not new to the corporate buy-out game. In the automotive sector, in addition to Chrysler, Cerberus owns parts maker Tower Automotive, insulation manufacturer CTA Acoustics, and bus maker Blue Bird. It also has a majority stake in auto financing company GMAC, which it will couple with Chrysler's financing arm to become the country's largest automotive lending entity. Cerberus owns ACE Aviation Holdings, the parent company of Air Canada, too. Outside the greater things-that-move industry, Cerberus also owns the Japanese bank Aozora, NewPage Corporation (MeadWestvaco's former paper operations), and film production house Spyglass Entertainment.
Advertising Agencies
aQuantive
In the M&A market these days, online advertisers seem to be what everyone wants. First you had Google spending $3 billion to buy up DoubleClick, a deal that was soon followed by Yahoo! stepping in to acquire the remaining 80% of Right Media (having purchased a stake in the company last fall). Come May an old-line advertising firm, WPP, decided to get in the game as well, swooping in to buy 24/7 Real Media. And now the biggest of them all enters the picture. Microsoft has dipped into its impressively deep cash reserves to pick up aQuantive for $6 billion. The thing that makes aQuantive so desirable to the software giant is its variety. The company owns online ad agency Avenue A/Razorfish, digital marketing software firm Atlas, and DRIVEpm, which buys ad space online and resells it on a targeted basis.
Meanwhile, ValueClick is just sitting there, biding its time until someone - other than investors waiting on a deal - becomes interested in it. Since the Microsoft/aQuantive deal was announced, ValueClick's status as the largest independent online ad company has helped its stock to pop, with investors pointing to it as the next likeliest to be snapped up.
Newspaper Publishing
Dow Jones & Company
It's enough to make a journalism professor wince. The staid, old, reliable Wall Street Journal in the hands of the man responsible for the New York Post and London's Sun? Perish the thought. And, yet, there he is, Rupert Murdoch, using News Corp. to make a $5 billion unsolicited bid for Dow Jones. Inevitably, there is much worry about what News Corp. has planned for one of the nation's most venerable newspapers, but Murdoch seems to have bigger ambitions. New Corp.'s Fox Broadcasting reportedly is getting set to launch a business channel (called Fox Business Channel, appropriately enough) later this year, and there's talk of using Journal reporters on the air and mining the paper's content to fill the unending demand of network airtime. And then, there's the not inconsequential fact that the Wall Street Journal Online is the Web's largest paid subscription news site. A handy online platform for a fledgling TV network to have at its disposal, no?
Diagnostic Substances
Cytyc
While they haven't yet found a cure for cancer, Cytyc and Hologic are teaming up to show the power of prevention. The two companies announced in late May a combination to form what would be the country's largest company focused exclusively on advanced technology in the field of women's health. Hologic specializes in mammography and breast biopsy systems, while Cytyc's ThinPrep System is used to detect cervical cancer and other diseases. The move marks a shift in strategy for both companies. Each had been content to grow through smaller acquisitions over the years: Novacept, Proxima Therapeutics, and the former Adeza Biomedical (now Cytyc Prenatal Products) for Cytyc and Suros Surgical Systems, R2 Technology, and AEG Elektrofotografie for Hologic. This deal, however, doubles the size of Cytyc and Hologic, and management clearly is hoping to dominate the women's health diagnostic marketplace. What is unclear is whether doctors and hospitals will agree with Wall Street that bigger is always better.