It's merger madness in the markets right now. And wouldn't you
know it? There's an exchange traded fund (
) to play it.
Among the deals, would-be deals and not-deals-yet include:
in merger news, the Genzyme (NASDAQ:
) board rejected a $18.5 billion offer that translated into $69
per share of Sanofi-Aventis (NYSE:
Why Biotech Is Feeling the Winds of Change.
- Intel (NASDAQ:
) recently bought the wireless unit of German chipmaker
), for $1.4 billion.
- BHP Billiton (NYSE:
) is still after Potash (NYSE:
) for about $12 billion and Reuters reports that word is the sale
is focused on nitrogen and phosphates. [
6 Ways to Access The Potash Bids With ETFs.
Add to all this activity the fact that S&P 500 corporations
are sitting on about $1.8 trillion in cash right now. They'll be
looking to deploy it in one way or another, and M&As may be a
way to do it.
There is an ETF that tracks an index designed to profit from the
spread between an acquisition target's current stock value and the
higher takeover price. The only major risk is if prices are lowered
during negotiation time.
IQ ARB Merger Arbitrage ETF (NYSEArca:reports John Spence
for MarketWatch. Assets are just under $30 million, but the
activity in this space could drive investors to the fund.
MNA doesn't speculate on deals - it only buys the target's
shares after a transaction has been publicly announced. Therefore,
it won't capture the big rallies that typically occur in the
target's stock after a potential transaction is unveiled. It's up
0.7% in the last three months and down 2% in the last six.
Tisha Guerrero contributed to this article.