I saw in the news yesterday that someone was looking to buy Paramount for $26B or thereabouts. I hope they at least went through the thought exercise of whether this builds more value than five huge acquisitions that could strengthen their offerings.
Apple has done buybacks for a while though, it is only much larger now. I believe their historical buybacks were around the $25b.
Doing this buyback is an indication that the roic is not great enough and deem it better to give it back to shareholders. Huge acquisitions are neither easy or cheap, cheap in the sense of not only the multiple you are paying but also the costs downstream of having to take over that company.
BigCorp buys BigCorp deals seem to be about consolidating the market to 1)reduce competition 2)raise prices 3)kill jobs = a)raise bonuses b)promise a higher stock value. Also synergy.
We'll get a pre-merger announcement about creating new jobs; biz media everywhere will excitedly amplify it.
Typically, the DoJ can't rubber stamp these deals fast enough but sometimes they balk - or at least pretend to.
Acquisitions tend to destroy value, especially "non core" acquisitions. I think they understand that not becoming a chaebol owning half the economy is actually a good idea.
