Mergers and Acquisitions Occurring at Record Clip

Mergers and acquisitions (M&As) are a factor in the imperialist economy further concentrating social wealth and power in fewer hands. The media report global takeovers are proceeding at a record pace. Seventeen of these deals since 2020 comprise transactions of more than $20 billion with two of the largest involving Canadian-based companies.[1] The largest is Canadian National Railway's acquisition of Kansas City Southern estimated at $29 billion. This acquisition concentrates the productive power of the two railways to become the largest in North America with operations throughout the continent. It appears to be part of the strategic aim of U.S. imperialism of integrating both Canada and Mexico into U.S. homeland security and its war economy with a secure rail transportation corridor. The railway merger dovetails with President Biden's decision to cancel the Keystone XL pipeline as more Alberta oil will now be shipped to the U.S. via rail cars. Some commentators said this fact alone pushed up the value of the merger, resulting in greater potential profits for owners such as Vanguard from higher stock valuations for both monopolies involved. It should be pointed out that global investment cartels such as Vanguard have ownership stakes in both these railway monopolies and manipulate and profit from M&As both as buyer and seller.

Another significant planned acquisition is between two Canadian telecommunication monopolies, Rogers Communications Inc. and Shaw Communications Inc. The takeover of Shaw is valued at $26 billion. These two monopolies already have overlapping ownership and operations and will become the largest telecommunications monopoly in Canada, slightly larger in enterprise value than BCE (Bell) and Telus, consolidating the control of Big Tech over the lives of Canadians.

Another merger involving the Canadian economy is a three-way $12.4 billion deal including Toronto-based insurer Intact Financial Corp., a European Danish partner called Tryg A/S, and British monopoly RSA Insurance Group PLC.

Globally, monopolies launched $1.3 trillion in M&As in the first three months of 2021. "This [is] the strongest opening period for deal making since records began," said Matt Toole, director of data service Refinitiv in a Globe and Mail article.[2]

Not only are deals being announced, but global investment cartels such as hedge funds are increasing their stock ownership in certain companies in anticipation of seeing share prices of those companies soar when the "inevitable" M&A occurs, which they themselves can manipulate and push along.

The Necessity for a New Direction for the Economy
and Democratic Renewal

The article in the Globe and Mail speculates, "The takeover frenzy is fuelled by low interest rates, banks' willingness to lend and soaring stock market valuations." It quotes investment banker Ian Macdonell saying, "Boards [of companies] realize the competitive landscape is changing and it's harder to be a regional player, in North America or globally, so if they can't be consolidators, they are sellers. Takeover activity will continue until the credit market tightens, the economic outlook weakens or we get a significant stock market correction."

The Communist Party of Canada (Marxist-Leninist) believes the Globe's speculation is disinformation to confuse the root cause of imperialist globalization where the rich become richer not only with M&As but through the war economy and domination of other countries and the global plunder of the value working people produce. The constant wars and increasing autocratic control of the global economy in the hands of an oligarchy underscore the necessity for a new direction for the economy and democratic renewal to form an anti-war government.

The M&A frenzy within the concrete conditions of the economy does not arise from "low interest rates, banks' willingness to lend and soaring stock market valuations." Such an analysis fails to explore the aim of the oligarchs in control and what is driving them to engage in such practices, and the consistent trend under imperialism towards concentration of social wealth and power in fewer hands as the rich fatten themselves on the wealth created by others.

The Globe's disinformation suggests that banks and their "willingness to lend" to finance M&As are somehow independent from the "low interest rates and soaring stock market valuations" and the M&As themselves. That is not the case. The banks and other financial institutions profit enormously through fat fees from organizing and arranging the deals and in other aspects of M&As.

The Globe's analysis describes various features of the imperialist economy but fails to analyze why these things occur. M&As arise out of the imperialist economy, as part of its parasitism and decay, to find maximum profit through the exchange and seizure of already produced value without going through any new production process and circulation of social product. Larger companies take over smaller or willing ones or force them into bankruptcy while the oligarchy roams the world for targets and wealth to pillage through bullying and war.

The ongoing imperialist tendency is to concentrate social wealth and economic and political power in fewer hands and to wage war for control and profit. These features are constant regardless of whether the "banks are willing to lend" or not. In fact, the banks and other financial institutions such as hedge funds are fully involved and integrated into the entire imperialist process as lenders, buyers, sellers, owners, organizers and war profiteers.

The entire process reflects the reality that nation-building is a feature of the past and that imperialist globalization, the politics of neo-liberalism, a war economy and nation-wrecking have seized control. If you delve deeply into the largest M&As, you will find that most of the private interests involved are one and the same or at least have the same aim and interest in seeing the M&A completed, or, if forced upon them, to emerge with the best possible terms. As said, the same private interests are often represented as lenders, buyers, sellers, owners, organizers and profiteers.

M&As form part of what the oligarchs call "unlocking shareholder value and shareholder value creation" and as such serve their fundamental aim to make maximum private profit in the fastest possible time. They have nothing to do with building a peaceful stable economy that serves the people, meets their needs and claims, and can be mobilized to humanize the social and natural environment. They are part of the global competition and constant wars for hegemony to become dominant in wealth and political power.

The drive to seize social wealth and power leads the competing oligarchs to enrol both public and private military might to achieve their aims to seize productive forces, markets, regions, and workers to exploit and to block or destroy any and all competitors or those who resist. The entire aim and practice of the oligarchs is contrary to the demand of humanity to live in peace and have economies that serve the people within a spirit of mutual benefit and development under their control.

A feature of the concentration of wealth and power in fewer hands is the continuous expansion of the proletariat as the largest social class. A consciousness develops that the economy is already socialized and in antagonistic contradiction with the private and autocratic control of the ruling oligarchy. The necessity for the actual producers to gain control over the already socialized economy, productive forces and social product becomes a rallying cry for change to bring the aim, control and direction of the economy into conformity with its already socialized character for the betterment of all humanity and Mother Earth.


1. List of largest mergers and acquisitions. The graph shows the largest M&As from 1879 to today. It highlights the expansion of U.S. imperialism, as most of the largest M&As during the twentieth century involve U.S. monopolies. The graph also shows the acceleration of the concentration of social wealth in the twenty-first century. 

2. Globe and Mail article by Andrew Willis: "Mergers and acquisitions activity has exploded. Here's why -- and the reasons it will continue for the foreseeable future."

This article was published in

Volume 51 Number 6 - June 6, 2021

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