The other, healthy M&A market

A year and a half ago, shoes-with-wheels maker Heelys was worth more than a billion dollars; yesterday, Skechers USA bought it for $143 million. As the private-equity drought keeps the mergers and acquisitions market largely lifeless, strategic mergers—company-to-company buyouts, usually in the same industry—are up this year, in dollar terms. About $800 billion in strategic deals have been inked this year, up 5 percent from the same period last year, as U.S. and foreign firms take advantage of low stock prices to swallow up rivals. “Corporate buyers were effectively squeezed out of the market for the last three years,” said Dan Alpert at Westwood Capital. “This is their day in the sun.” (Los Angeles Times)

Wal-Mart profit and forecasts rise

Wal-Mart reported a better-than-expected 17 percent rise in quarterly profit, to $3.45 billion, and raised its forecast for full-year earnings. The world’s top retailer benefited from the U.S. tax rebate checks and widespread bargain shopping in the weak economy. (Reuters) Sales rose 10.4 percent, to $101.6 billion, slightly missing Wall Street expectations. (AP in Yahoo! Finance) Wal-Mart shares, up 22 percent this year, are the best performer in the Dow Jones Industrial Average. Aside from cheap products, Wal-Mart also gained from internal reorganization. “In the U.S., they’ve undertaken a big turnaround,’’ said Patricia Edwards at Wentworth, Hauser & Violich in Seattle. “Their stores are cleaner and better stocked.” (Bloomberg)

InBev profit rises, bucking expectations

Belgium-based beer giant InBev reported an 8.6 percent rise in quarterly profit, to $805 million, as a lower tax rate and strong Brazilian results helped offset a 0.3 percent drop in sales and a decline in Russian shipments. Analysts had expected a small decline in profit. (MarketWatch) With rising ingredient and energy costs, “it was a difficult environment and they tried to offset cost increases by price increases, but not all could be captured,” said Vangelis Bratsikas at Clariden Leu in Zurich. (Bloomberg) InBev will become the world’s largest brewer when it finishes its $52 billion takeover of Anheuser-Busch this year. It said it is on track to secure $45 billion in financing for the deal next week. (AP in International Herald Tribune)

Michael Phelps, billionaire swimmer?

U.S. swimmer Michael Phelps is worth about $3 million in Olympic gold, with his 11 gold medals making him the most successful Olympian ever. But at age 23, Phelps will easily surpass Mark Spitz to become the wealthiest swimmer ever, too. Ever since the Olympics began allowing pro athletes to compete 20 years ago, the games have become big business opportunities. But until Phelps, no athlete has been able to capture the brand recognition of a Michael Jordan or Tiger Woods, who is projected to become the first billionaire athlete in 2010. Some now think Phelps could hit that mark, too. “He’s a billion-dollar man,” said Australia-based celebrity agent Max Markson. “He won’t have to get a job ever. He can live off this for 50 years.” (Reuters)