NEW YORK-On the strength of three large mergers, communications led domestic industry sectors in merger activity last quarter, a period in which the dollar volume of these deals totaled nearly twice that of the same period a year earlier.
Some 1,974 planned mergers and acquisitions were announced during the first three months of 1999, in transactions totaling $357.9 billion, according to Mergerstat, a division of Houlihan Lokey Howard & Zukin, a Los Angeles investment bank.
Of the total, 46 transactions accounted for just 7 percent of those first-quarter deals whose dollar values were made public but 81 percent of the aggregate dollar value.
Foreign buyers made public their plans to acquire American companies in 105 deals totaling $105.3 billion. British companies led the buying binge from overseas largely due to Vodafone Group plc’s $54.9 billion offer for AirTouch Communications Inc. This deal also is the fourth largest in history.
The other two leading communications services provider transactions announced during the first quarter were Comcast Corp.’s acquisition of MediaOne Group Inc. for $52.6 billion and Global Crossing Ltd.’s acquisition of Frontier Corp. for $10.6 billion.
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With 77 merger and acquisition announcements, including 31 deals with a combined value of $128.2 billion, the communications sector accounted for 36 percent of the first-quarter total.
“Communications rang up the highest share of the overall deal market in the first quarter as global players continued to bulk up to strengthen their positions in the converging businesses of local, long distance and wireless communications, as well as cable TV and Internet-related services,” Mergerstat said.
In terms of numbers of mergers and acquisitions announced, computer software, supplies and services ranked first with 291 announcements last quarter. The $39.6 billion in total value of these deals placed this sector second after communications by this measure.
“The unbelievable momentum of 1998 has carried over into this year due to continued strength in the fundamental drivers: an unstoppable stock market, stable interest rates and confidence in corporate earnings,” said Bill Clark, chief operating officer of Mergerstat.
“Plus, globalization, consolidation, deregulation and competitiveness are still the underlying strategic themes motivating the participating companies.”