>there is speculation of brunswick corp making a $25 bid for the company....but are waiting til after numbers are released.....I'm long for the ride.... --jeff
Jeff, although stranger things have happened, I find this highly unlikely indeed. Let's take a look at the pluses and minuses for Brunswick/Mercury:
The only part of Fountains line that Merc doesn't dominate already is the necessary drivetrains for the new large cruiser models. Moot point as Merc doesn't have a product to compete in this area. So, unless they have a high end inboard drivetrain under development or coming as part of a new venture, what growth does this purchase give Merc?
Also, the industry backlash from the other High Perf builders who will now be competing with their primary supplier in this lucreative segment will entice many to consider the cost relationship with 2nd tier custom shops like Chief, Hawk, etc, etc.
Obviously, Merc has control of the drives and it's domination is tough to break, but there are a number of decent drive designs out there that no one wants to finance in light of this uphill battle against Merc. Second, OMC and Volvo/Penta would quickly ramp either design/development or buy the technology to supply the 2nd tiers. Why would Merc they take this risk for modest opportunity of core distribution growth with Fountain to isolate the rest of the High Perf industry and let the others get a foot in. Doesn't make sense. This is the cash cow segment for Merc and they'd be fools to play games.
Like I said, stranger things have happened and you never know of other deals that may be pending, but with that said, if this happens, I'm going to seriously consider shorting Brunswick!
My 2›,
-Scott |
