The defense industry mega-merger between United Technologies and Raytheon is big news, but is bigger always better?
There are obvious benefits to the deal announced Sunday. United Technologies -3.13% and Raytheon Co. +0.69% will combine to create a $100 billion-plus aerospace giant, the second largest in the word behind Boeing Company, and put pressure on the Pentagon now that there's one less bidder for big-ticket contracts. There also isn't a buyout premium in the cards, so shareholders are being asked to evaluate the deal based on present value and not the promise of big future synergies.
But as history shows, these megadeals aren't always such a good idea. Sometimes the numbers simply don't materialize as investors and management planned — or even worse, the deals were built on a pile of lies.
Only time will tell how United Technologies and Raytheon shareholders will judge this proposed deal, if and when it’s approved. But the following seven deals are proof positive that big-time mergers can result in big-time mayhem for shareholders: (end of excerpt)
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