How big are mergers and acquisitions this year?
Here are some numbers from a Slate article called "Wall Street's Hot M&A Fantasy" (10/31/ 2003):
The rash of deals helped push the year-to-date volume of mergers and acquisitions to $405 billion. That is certainly better than last year, when animal spirits were caged. (Through October 2002, deals totaled $360 billion; they finished the year at $432 billion.) But by recent historical standards, M&A is still in the doldrums. In 2000, when animal spirits rampaged like a tiger at the Siegfried and Roy show, mergers totaled $1.7 trillion-a reflection of frenzied deal-making and absurdly high asset prices. In 2001, $756 billion in deals were sealed. Back in 1994 and 1995, when the Dow ranged between 4,000 and 5,000 and the economy was far smaller than it is today, mergers were about $335 and $504 billion, respectively. In other words, as measured as a percentage of stock-market capitalization, or Gross National Product, mergers are still pretty depressed.
We are just seeing a new spurt of M&A's, but it's just starting in some sectors. Of course, one of the reasons for the slowdown is that industries are already far more consolidated than they were in the 90s. That, combined with the caution of financial institutions, have slowed things down. But I think another big issue is digestion. It has taken years for some companies to digest their acquisitions, indeed a number of companies have suffered from acute indigestion (Time Warner, Disney) or have had to cough up their acquisitions (Vivendi, Philip Morris). Nevertheless, those companies that have been skilled at integrating their purchases (GE, Citigroup, News Corp.) are hungry for more.
6:10:46 PM 
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