NEW YORK-Contrary to headlines about heavy merger activity in all sectors, the $234 billion worth of transactions for which dollar values were disclosed last quarter doesn’t come close to either of the prior two quarters.
Nevertheless, aggregate merger and acquisition deal values stood at $992 billion for the first nine months of this year, about $49 billion ahead of the 1998 total for the same period. Last year set a record of $1.19 trillion, according to Mergerstat, a division of Houlihan Lokey Howard & Zukin, a Los Angeles investment bank.
While acquisitions in the telecommunications and wireless sectors seem to arrive at a record and accelerating pace, they accounted for just 136 of the 2,392 mergers and acquisitions involving American companies that were announced in the third quarter. Within that group of 136, the ongoing roll-up of Internet service providers comprised 59 of the transactions.
Only 45 of the wireless and telecommunications companies announcing merger agreements last quarter attributed a dollar value to their deals. This group collectively accounted for $54 billion of the $234 billion worth of acquisition combinations during that period.
Breaking the $1 billion threshold in the wireless/telecommunications sector were the “magnificent seven” transactions, which accounted for nearly $38 billion of the $54 billion total.
The largest of these was Motorola Inc.’s $11.47 billion offer for General Instrument Corp., an acquisition Motorola said would help it serve carriers looking to bundle wireless, wireline and broadband services. This merger also ranked ninth among M&A transactions announced in all industry sectors during the first nine months of this year.
The Deutsche Telekom AG purchase of One 2 One Ltd. from MediaOne Group Inc. and Cable & Wireless plc for nearly $11.13 billion was the largest carrier merger and the second largest such transaction within the telecommunications/wireless sector during the quarter.
Of the five acquisitions involving American wireless carriers last quarter, two were announced on Aug. 10: Leap Wireless International Inc.’s $16 million purchase of OzPhone Pty Ltd. from AAPT Ltd. and Formus Communications Inc.’s purchase of Cel Polska spa, for which no dollar value was provided.
