Bad M&A, bad M&A

Here is an interesting story from Bloomberg News -- M&A Losers in $10 Trillion Deal Binge :

More than half of the 100 biggest takeovers made during the last mergers-and-acquisitions boom have something in common: By one measure, they never should have happened.

The stocks of 53 companies that made the biggest purchases from 2005 to 2008 lagged behind industry peers two years later, according to data compiled by Bloomberg's ranking group.
. . .
Companies struck $10 trillion of deals during the last merger binge, even after more than a decade of research showing deals often don't pay off for the buyers. The average stock price of all the top acquirers trailed benchmark indexes by an average of about 3 percentage points.

Maybe if they had done a better job of analyzing the intangible assets -- and more importantly coming up with a strategy for managing them post-M&A -- those bad deals might not have happened or turned out as badly.

Then again, maybe this is a story about how the market doesn't understand or value intangibles correctly. Maybe the stock prices went down because the analysts could only see the expenses without seeing the assets.

More research is clearly called for.