Merger, acquisition mania continues

Paris, April 10:

They may wed willingly like Lucent and Alcatel, or it might be a forced marriage, as in the hostile bid by Mittal Steel for Arcelor. But whatever the circumstances, mergers and acquisitions continue to be highly fashionable.

“The wave of mergers has continued at full steam at the start of 2006,” according to data provider Thomson Financial. Its latest report shows that the number of mergers and acquisitions announced — but not necessarily completed — in the world in the first quarter of the year leapt by 44.9 per cent compared to the same period of 2005, reaching a value of more than $880 billion.

The most active sectors were energy and telecoms. In Europe alone, the progression was 114 per cent. The volume of deals, valued at $443 billion, reached its highest level since 2000, at a time when the hi-tech bubble was finally bursting. The three biggest operations announced — none of which has been completed as yet - make up more than a quarter of the European total.

They were German energy giant E.ON’s 29.1-billion-euro hostile bid for Spanish gas group Gas Natural, Gaz de France’s 44.7-billion-euro merger with French utilities group Suez, and Mittal Steel’s 18.6-billion-euro hostile bid for Arcelor.

The biggest operation so far completed in Europe is the friendly 25.9-billion-euro bid by Spanish telecoms giant Telefonica’s for the British mobile phone company O2, according to Thomson Financial.

Economic nationalism

BEIJING: International companies vying for a piece of China’s growth miracle have hit unexpected trouble in the form of ‘economic nationalism’ and foreign dominance fears. A broad coalition of officials and businesspeople have voiced concern that massive sales of China’s assets could lead to foreign monopolies in key sectors. “If China lets multinationals’ malicious mergers and acquisitions go ahead freely, China can only act as labour in the global supply chain,” said Li Deshui, China’s former chief statistician. — AFP