Why Siemens Agreed to Buy Dresser-Rand for $7.6B

The transcript discusses a trend of German companies acquiring US firms, highlighting recent deals by Siemens and Merck. Siemens is expanding into the shale gas sector, while Merck diversifies into chemicals. The discussion covers capital redeployment, European market dynamics, and competition between GE and Siemens. Despite significant mergers, market reactions remain subdued, possibly due to market saturation and recent events like the Ali Baba fervor.

What strategic move is Siemens making with the Dresser Rand acquisition?

• Investing in renewable energy

• Diversifying into the automotive sector

• Expanding into the shale gas market

• Entering the pharmaceutical industry

Why is Merck's acquisition considered significant?

• They are paying a low premium

• They are acquiring a U.S. competitor

• They are diversifying from pharmaceuticals to chemicals

• They are entering the tech industry

What financial benefit is expected from the Siemens deal?

• Immediate accretion to earnings

• Reduction in operational costs

• Increase in market share

• Expansion of product lines

What is a key reason for the increase in European M&A activity in the U.S.?

• Lack of investment opportunities in Asia

• Strict regulations in Europe

• Cheap money and low growth in Europe

• High growth rates in Europe

How has the market reacted to the recent wave of mergers?

• With indifference

• With significant enthusiasm

• With skepticism

• With panic