You know M&A mania is winding down when the best acquisition target Pfizer (PFE) could come up with is struggling rival AstraZeneca (AZN). Yes, AstraZeneca has an interesting cancer immunology pipeline (thanks to the 2013 acquisition of Amplimmune), but there’s little else under the company’s umbrella that could be a game-changer for Pfizer, leading many to wonder if $100 billion is too much to put on the table.
The possible union of AstraZeneca and Pfizer isn’t the only thing that suggests all the good buyout targets have already been snagged. Newmont Mining (NEM) ended M&A talks with Barrick Gold (ABX) earlier this week. Snapchat said no to a generous $3 billion offer from Facebook (FB) late last year. Allergan (AGN) shareholders are balking at the $47 billion bid from Valeant (VRX) — not just because they believe the company is worth more, but because the two companies are so culturally different; integration could be a problem.
So what, pray tell, are CEOs going to do next in the name of creating value for shareholders? Ironically, the next big thing companies are apt to use to prove management’s mettle is the exact opposite of mergers and acquisitions: spinoffs.
In fact, the rise of the spinoff as the preferred way to keep investors interested may already be underway. Earlier this month, co-founder of The Spinoff Report, Ryan Mendy, predicted that North American companies could raise as much as $2 trillion this year by spinning off as many as 46 companies, which would be a record.
That being said, despite the spinoffs already in the works, it’s the spinoffs that aren’t underway yet that are some of the most compelling, and perhaps a little more likely the market may realize. Four of these possible spinoffs are especially enticing: