Martin Lipton’s M&A Letter: 2008 Edition

martin lipton M&A

 Here is a resource for all the finance geeks out there:

[Martin Lipton’s M&A Activity 2008]

Martin Lipton is a founding partner of the infamous Wachtell, Lipton, Rosen & Katz the firm that generates the most revenue per employee of any firm worldwide. While Lipton is quite the entrepreneur in his own right, he is perhaps best known within finance circles for his annual letter of M&A activity predictions. Among finance gurus – especially those with a predilection for M&A – Martin’s letter is revered on the same level as Warren Buffet’s annual address in Omaha.

So what does Martin say about M&A in 2008? While he is not as dire as some, he is more ambivalent than optimistic. States Lipton:

“With the timing of recovery of the debt markets and with predictions, by Alan Greenspan and others, of a 50% chance of recession, it is not possible to predict with any degree of confidence what M&A activity will be in 2008�

Though there is little in the letter specific to tech, Lipton does suggest that the breaking apart of longstanding companies will likely be a key driver:

“Dispositions, demergers and spinoffs by companies adopting (often in response to shareholder pressure) policies to focus on core competencies�

This could paint the way for happenings such as an AOL spin-off from Time Warner or a breakup of Yahoo for example.


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