This may have been related to the fact that we have recently received a whole bunch of disappointing economic releases including industrial production and unemployment. Yet, the underlying report does show a sliver of hope with personal consumption edging up modestly from the previous quarter. The M&A flow that we are talking about is actually a big one. Warren Buffett announced plans to buy PacifiCorp from Scottish Power for $9.4 billion. Given that over 50 percent of the deal will be in cash, we expect Buffett’s company to be doing a big exchange rate transaction to pay for the deal. If you recall, close to a year ago, Warren Buffett said that US investments are not as attractive as they use to be and that he will also be looking abroad for investment opportunities. Today’s M&A announcement is a perfect example of him doing so and we will not be surprised if more of such cross border acquisitions or investments follow this one.
M&A Flow Helps Pound Shake Off Weak GDP
Wed May 25 22:01:00 GMT 2005