3 real-world deals despite fiscal cliff overhang

While Washington continues to argue about a budget deal, companies are making real business deals left and right.

By Jim Cramer Dec 20, 2012 10:15AM

thestreet logoCorbisHow easy it is to focus on the tortured talks of Washington. You don't have to do a lot of work. All you need to do is turn on the television and see two leaders who obviously despise each other talk about how his opponent wants to raise taxes on the middle class. We only need to know when they are coming on, not what they are going to say -- we have that nailed down -- and then we can watch, with awe, at how hedge funds come out of the woodwork to blast down the S&P 500 ($INX) futures.


I just wish they would make it even easier. I wish when Speaker Boehner would come on he would dispense with the formalities and say, "I would sell the S&P down 2% based on my talks today." Or the President should limit his comments to "You better bang out of some Apple (AAPL), and be careful of the 50-day moving average of the transports because Speaker Boehner wants to raise taxes on everyone rather than hit up the hedge fund managers for their fair share."


Hedge fund managers should have to pay more given the annuity stream these two are generating.


But then, every once in a while, the real world intrudes, and you realize that the indices that are bouncing around off of the sinking below in Washington are made up of stocks and that stocks actually represent the fortunes of real companies.


Right now the real world is intruding in a big way with NYSE Euronext (NYX), Gardner Denver (GDI) and Alterra Capital Holdings (ALTE).


The first, you know by nature, but probably not by reason. CNBC's own David Faber broke the story Thursday morning that NYSE Euronext is in talks to be acquired by IntercontinentalExchange (ICE) for about $33 a share.


We think of NYSE as the place at which equities trade. IntercontinentalExchange, however, most likely thinks NYSE Euronext is a worldwide futures exchange with an unfortunate equities business with too much overhead. I bet IntercontinentalExchange thinks it could come in, smash the paternalism of the place and just get its hands on the machines, rationalizing a growth business (i.e., the futures) while stemming losses in a no-growth business (i.e., the equities).

It makes sense as a terrific consolidation play, and it is something that is happening irrespective of Washington.


The second intrusion of the real world into the surreal Washington world? Gardner Denver is in talks to be acquired by SPX Corporation (SPW).


You may not know Gardner Denver, but it is integral to the oil and gas food chain because it makes air compressors. Oil and gas drilling is very much in bull market mode because of the combination of hydraulic fracturing and horizontal drilling, and SPX is a classic industrial good manufacturer that needs to have more exposure to growth.


SPX could end up stealing Gardner Denver, which has been hit hard by the slowdown in natural gas drilling, for $4 billion, barely unchanged for the year. Still, it's a huge win if you bought it when Gardner Denver announced a shortfall earlier this fall and fell to $55. An impatient activist, ValueAct, obviously not focused on the charade in Washington, is getting the job done.


Finally, there is Alterra, a very big reinsurance company that just caught a bid from Markel (MKL), a well-respected insurer that's always been undervalued. Markel is picking up Alterra for $3.1 billion, a nice chunk of change, yet it seems as if the market didn't even notice.


And that's really the point. Three big deals, three that happened without worries of fiscal cliffs and off-again/off-again talks. Real money changing hands. Real wins to be had.

If anybody cares to have them.


Cramer's face


Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long AAPL.




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Dec 20, 2012 11:16AM
All this focus on budget talks for nothing, just theater and of bad quality.
Dec 20, 2012 6:51PM

You want to balance the budget...give all these overpaid lobby protecting politicians a 5% cut in pay and make them pay for their health insurance like every american has to and you will see how much the deficit will be reduced,,,forget all the rest of the bs that both sides are flingging to America


Dec 20, 2012 11:52AM
What? Hey... the world ends tomorrow... want to buy my pariah? I'll buy yours! The WORLD watches America stumble into a mire most thought we knew better to avoid. We are about to become one of the WORST nations in the world and 100% of that can be blamed on organized platform business and lobby-powered deadbeat elected Officials in Congress. One thing is for sure... if we cannot get cooperation we get replacement until we get cooperation. FOOLS and their fiat money are about to part... like spoiled kids getting the trillionth cookie taken away. If it's all you got, your withdraw from the sugar high will hurt a lot.

Close the now globally-recognized as corrupt banks. End the Federal Reserve. Get RID of Wall Street. The Fiscal Cliff is resolved by Job Recovery. Arrest those who blockade our restoration and force them off our shores.

Dec 20, 2012 6:16PM

Boehner and the Republicans playing political charade in time of crisis, cliff-type or not, is reason for immediate recall elections.  How long should America wait while fools, thieves and incompetents drag the nation down?  There are definitely deals being made everyday in America, it's just that most of them don't do much to increase job growth.  Most deals, particularly in the financial and service industries are still pretty much totally focused on cost-reduction which typically leads to reductions in the work force.

It's time for government to take real action to increase sustainable growth in America, based not on over-commercialization and over-corporatization but on what is best for long term human growth, good living and good health over time.

There is nothing to figure out.  A bunch of people get together and make business deals to do what needs to be done and not being overly preoccupied with the pay-off, the pay-off being self-evident throughout the nation for its having gotten better over time and not increasingly worse.

Dec 20, 2012 5:44PM
Over the next couple of days you will be seeing cheer leaders like Cramer jumping up and down on CNBC about a 3% GDP. If we look closely at the number and factor out the increase in the cost of health care services, increase in unsold inventories, and inflation, the number is about 1.8%. Truth is the 3% number is not indicative of the consumer increasing discretionary spending. You Have To Have Good Paying Jobs to support more spending, it's not rocket science.
Dec 20, 2012 3:53PM
Hope you read the updates, Jim. Eric Cantor will push ahead with the GOP Plan B. According to insiders, he has more than 24 Republicans who won't vote with him and no Democrat will. It's a failure and should end his credibility with his own state's voters.

I don't know if the world ends tomorrow, but I'm pretty sure the GOP does. Good riddance. 
Dec 20, 2012 6:47PM
Headlines read that the Dow is up due to hopes on a fiscal cliff compromise. It's a sham. We're still screwed! Ben "Dover" Bernanke is devaluating our currency yet again with QE4. Obama and Congress will continue to spend like drunken sailors -- and continue to borrow to do it. This country spends about $480 billion annually on interest alone. Anything that this corrupt government comes up with will not be enough. Most analysts agree that we need AT LEAST a 45% decrease in spending. Gold and silver are looking reeeaaaallllly good right about now.
Dec 20, 2012 8:13PM

I understand that there are five (5) lobbyists from financial firms for every congressman. What the total number is, from all industires, must boggle the mind.


How can the people's business ever get bdone with numbers - and money - like that?


The system is completely broken.

Dec 20, 2012 6:51PM
Is this a financial column or a piece of political tripe?  The propaganda distorting the political realites seem inappropriate for a column which represents itself to deal with financial analysis.
Dec 20, 2012 8:10PM
We ,as Americans are going down.We buy too much crap that we do not need nor can we afford it!
Dec 20, 2012 6:04PM

Another good day in the market.We`re making a lot of money off your picks.


Dec 20, 2012 12:00PM
By the way... have you signed-in to your 401K or Retirement Account and re-allocated your holdings to safe and preservation options? The vast majority believe the 12/21 predictions. Even if you don't you will lose when the majority shifts to protect itself. Only those with their heads in the sand will be caught in stocks that have no substance. America is unemployed and business platforms are in leased office towers. Without personnel, tangible assets, too much over-paid administration and a drop-ship import culture... the free fall goes to ZERO. Better to have some than none, but that's up to you. Bet your broker has his protected already.
Dec 20, 2012 12:40PM
"I just wish they would make it even easier. I wish when Speaker Boehner would come on he would dispense with the formalities and say, "I would sell the S&P down 2% based on my talks today." Or the President should limit his comments to "You better bang out of some Apple (), and be careful of the 50-day moving average of the transports because Speaker Boehner wants to raise taxes on everyone rather than hit up the hedge fund managers for their fair share."

Now there's a wheelbarrow full of malarkey. Boner is about to get pinned in a corner with some mandatory revelation. If it comes down to economy or continued control by a corrupt financial sector, then you should invest in union gallows and rope makers... because that would indicate Treason. The show won't go on this time. When a nation is faced with going into a Black Hole or throwing financiers into it and changing course to remedy and restoration... our Plan B will trump his Plan B every time. 
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