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Analysis-Banks profit from building up and breaking up companies

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Reuters

By Anirban Sen and David French (Reuters) – It is a constant dilemma facing companies; do they acquire or shed businesses to boost shareholder returns? Investment bankers profit every time the answer involves a deal, even if it represents an about-face for the companies. Last week’s announcements by General Electric Co, Toshiba Corp and Johnson & Johnson of their plans to break up offer the latest examples of how some companies have spent hundreds of millions of dollars on investment banking fees to bulk up through acquisitions over the years, only to pay more fees to reverse them. Some of the…

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