M&As race to a new record in ’99

[Ulhas Joglekar]

DEC 24 1999
The Economic Times Online
M&As race to a new record in ’99
New York
23 DECEMBER
US MERGER and acquisition activity hit a seventh consecutive record in 1999,
powered by a handful of huge transactions even as the number of announced
deals declined, according to data issued on Wednesday. Preliminary figures
from Thomson Financial Securities Data indicate more than $1.72 trillion
worth of deals were announced so far this year in the US, topping $1.63
trillion in 1998.
Worldwide, more than $3 trillion worth of deals were announced in 1999,
topping the $2.6 trillion logged in 1998.
European activity soared 105 per cent over 1998 to $1.2 trillion for the
year. Of the total, Britain accounted for $386bn of the deals, followed by
Germany with $261bn and France with $163bn.
Deals involving Asian targets topped $162bn in 1999, a record level more
than double 1998's total of nearly $77bn.
So far in the fourth quarter, global M&A activity was valued at $1.05
trillion, with the US accounting for a record $543bn of the total. Europe
accounted for 39 per cent, with a record total $409bn that included Vodafone
AirTouch's record-breaking hostile bid for Mannesmann.
Securities Data said investment banking powerhouse Goldman Sachs Group Inc
held the top world spot among mergers and acquisitions advisers, beating off
arch rival Morgan Stanley Dean Witter. The figures indicate Goldman advised
on announced deals worth a total of $1.28 trillion, ahead of Morgan
Stanley's $1.13 trillion and Merrill Lynch with $1.03 trillion. The data
comes as no surprise to merger experts, who expect consolidation to continue
into 2000. But a slowdown in the number of deals is also considered
significant.
The number of US transactions declined to about 10,500 from 1998's record
12,300 deals. "It's something you can't lose sight of. There's only so many
$100bn deals you can do,” said one veteran investment banker.
The number of hostile bids accounted for more than 15 per cent of overall
value, or a record of nearly $485bn. However, Securities Data also noted
that hostile bids only have a one-in-five success rate. More than $561bn of
the total deal value centred on the telecom industry, topping the combined
amount seen in the commercial banking and radio and television broadcasting.
More than one-third of the value came from two deals — Vodafone's
acquisition of Airtouch, and MCI WorldCom Inc's pending acquisition of
Sprint Corp. —Reuters
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