This is the VOA Special English Economics Report.
Companies combined or bought other businesses at record levels last year.
Almost four trillion dollars in deals worldwide represented an increase of
nearly forty percent from the year before. So far in January, merger and
acquisition activity has remained strong.
In the airline industry, US
Airways this month raised its recent offer to buy Delta to ten billion dollars.
If that goes through, there could be other airline deals coming.
General Electric has recently added some new manufacturers to its mix of
businesses.
But in the biggest deal of last year, AT&T merged with the
telecommunications company BellSouth. That deal in the United States was valued
at seventy-three billion dollars, not including debt.
The satellite radio industry has had increasing talk of a merger between XM
and Sirius, the two major companies. But the head of the Federal Communications
Commission in Washington said this week that one company could not own both
operating licenses.
With all the deals last year, investment banks did well. Goldman Sachs
advised on more than four hundred mergers -- valued at over one trillion
dollars. Citicorp and Morgan Stanley were not far behind.
A merger is when two or more companies combine their operations. Generally
the combined company is able to negotiate lower prices with suppliers because of
its bigger size and market. Jobs are sometimes also cut in mergers to save
money.
The idea is to increase the value of the combined company for shareholders.
But that does not always happen. Some experts suggest that only one merger in
three creates big gains for shareholders. At the same time, mergers can reduce
competition, resulting in higher prices.
The simplest way for companies to combine is through an acquisition. One
company buys another. A hostile takeover is when the target company did not
invite or approve an offer to its shareholders.
Last year, the world's biggest steelmaker, Mittal of India, succeeded in
buying all the shares of its top competitor, Arcelor of Luxembourg.
Companies may take a large part or a small part in guiding the policies of
the businesses they acquire. Investor Warren Buffett is known for buying
controlling shares of stock in companies but leaving their management teams in
place. He says he is not interested in companies without established management.
And that's the VOA Special English Economics Report. I'm Mario Ritter.
点击进入更多VOA慢速
（来源:VOA 英语点津姗姗编辑）
