M&A/Tax:_ Lashings of leverage

Trade buyers had the advantage of synergies, it used to be said; while LBO houses trade buyers had leverage. But now trade buyers can have both. This thinking helps explain why some of the most-high profile acquirers in the current European takeover scene - E.on, Mittal, Ferrovial, Linde, Sonaecom and even possibly Enel - are so keen to do deals, even when the hard industrial synergies look thin. E.on won’t be able to scrunch many costs from Spain’s Endesa; nor would Enel be able to extract many...