NEW YORK-WorldCom Inc.’s early October offer of $35.28 billion for MCI Communications Corp. was by far the single largest merger of any kind announced not only during the fourth quarter of 1997 but also for the entire year.
The WorldCom-MCI pairing accounted for nearly two-thirds of the $55.2 billion in equity value of telecommunications company takeovers whose prices were disclosed last year, according to Mergerstat, a research service of Houlihan Lokey Howard & Zukin, a Los Angeles investment bank. During 1997, there were 169 telephone company acquisitions announced, of which 78 disclosed a price.
Besides topping the merger and acquisition charts for the year with its MCI bid, WorldCom also took second-place in the fourth-quarter telecommunications company rankings for the size of its $2.2 billion offer for Brooks Fiber Properties Inc., an alternative local exchange carrier.
In third place for the fourth quarter was Tele-Save Holdings Inc.’s $840.2 million offer for ACC Corp.’s TeleNational Communications unit, a long-distance services provider.
Despite the flurry of merger and acquisition activity in the telecommunications arena last year, it was eclipsed by consolidation in two other industry sectors-banking and finance and brokerage, investment and management consulting.
Telecommunications, which ranked first in 1996, moved into third place behind these two industry sectors during 1997.
Houlihan Lokey’s Mergerstat tracks publicly announced mergers and acquisitions involving U.S. companies, excluding the exchange of business assets, private placements, spin-offs and open-market transactions. Mergerstat tracks the gross value of the equity involved without deducting from that total the liabilities of the acquired company.
