NEW YORK-With more than 7,700 transactions valued at $1.2 trillion announced, the domestic
mergers and acquisitions market for 1998 crushed by 84 percent its previous record of $650.7 billion, set the prior
year.
Although the number of deals was about even with 1997, the average transaction size last year was $393.7
million, an 88.2-percent increase, according to the Mergerstat division of Houlihan Lokey Howard & Zukin, Los
Angeles.
The increase in average transaction size was fueled by increases both in the number and size of ‘mega-
deals’, those valued at $1 billion or more.
“This was clearly the year of the ‘mega-merger’,” said Bill
Clark, chief operating officer of Mergerstat. “Mega-mergers accounted for $919.2 billion and 77 percent of the
total deal market.”
In the telecommunications sector, three deals fit that category during the fourth quarter:
AT&T Corp.’s $5 billion purchase of IBM Corp.’s global communications network; Alltel Corp.’s $1.39 billion
acquisition of Aliant Communications Inc.; and the $1.1 billion takeover of Cellular Communications International by
Olivetti SpA/Mannesmann AG.
For the year, the telecommunications sector was second most active in mergers,
after financial services. Communications deals accounted for $170.1 billion and 14.3 percent of deal volume in
1998.
In all sectors, the second- and fourth-largest announced mergers were, respectively, SBC Communications
Inc.’s offer to buy Ameritech Corp. for $61.4 billion and Bell Atlantic Corp.’s offer to buy GTE Corp. for $52.8
billion.
Houlihan Lokey’s Mergerstat tracks publicly announced mergers and acquisitions involving U.S. business
entities, excluding the exchange of business assets, private placements, spinoffs and open-market transactions.
Its
deal value totals exclude those transactions for which companies announcing mergers did not disclose that information.
