Recessions - the seedbed of future fortunes.

Lots of mergers and acquisitions underway across the world these days.  The two big ones that caught my attention this week are Oracle buying Sun and Tech Mahindra buying Satyam.  Two very different acquisitions!  I think the Oracle/Sun merger is interesting - insofar as it is Oracle aiming to stand shoulder to shoulder with IBM and HP.  This sort of ambition has it's costs of course, quite apart from the $7bn and change that they paid.  One of the costs might be Oracle continuing to have to spend even more money to fill out it's portfolio with a top class services and consultancy arm to become a credible peer.  The other cost might mean Oracle having to reassess some of its partnerships now that it is stepping up to be a credible rival to HP and IBM.  Oracle also has a hard decision to make as to whether it retains Sun's hardward business or just it's considerable software assets.  The Tech Mahindra acquisition of Satyam is a bit more of a shot in the dark.  As far as I'm aware it's not yet clear the full extent of the Satyam recent troubles, so valuing Satyam at $1.2bn might be the deal of the century ........ or it might be otherwise.

However, what both these deals show is a level of faith on the eventual upturn.  They say the best way to make money is to "sell when others are buying and buy when others are selling". Both Oracle and Tech Mahindra must have bought into this mantra.  Recessions are finely balanced entities and are the seedbed where fortunes are made.  So whether these two M&A ventures work out well or badly, this sort of mindset is what is going to decide the winners and losers as we emerge from the recession.  The first green shoots of an upturn?  Perhaps.