RECORD SET IN MERGE SPLURGE
Stock swaps driven by an ebullient market and easy access to deal financing helped set yet another record…
Stock swaps driven by an ebullient market and easy access to deal financing helped set yet another record for mergers and acquisitions.
Through Dec. 18, U.S. companies had announced 11,002 mergers and acquisitions worth $1.59 trillion, vs. 11,145 deals worth $907 billion in 1997, according to Securities Data Co. in Newark, N.J.
While the federal government had its hands full building its case against software Goliath Microsoft Corp., dozens of deals in the financial services sector sailed through as banks and insurers stretched to add scale and products.
In addition to a surge of bank mergers, the insurer American International Group Inc. shouldered its way into the variable annuities market by paying $17.8 billion for SunAmerica Inc.
International deals were among the year’s biggest, led by Deutsche Bank AG of Germany’s $9.7 bid for Bankers Trust New York Corp.
Market turmoil in September and October slowed the consolidation frenzy, but the pace recovered once the Federal Reserve Bank of New York brokered a bailout of Long-Term Capital Management LP, after which Fed Chairman Alan Greenspan helped restore confidence in the credit markets by cutting short-term rates three times.
The year’s biggest gusher came in December when oil giants Mobil Corp. and Exxon Corp. agreed to merge in an $80 billion-plus deal.
TOP 20 financial services TRANSACTIONS
Rank Announced Seller (Unit Sold) Buyer (Buyer Unit) Deal size ($mm)
1 April BankAmerica Corp. NationsBank Corp 43158.32
2 April Citicorp Travelers Group Inc 36031.64
3 June Wells Fargo & Co. Norwest Corp 31660.23
4 June General Re Corp. Berkshire Hathaway Inc 21174.20
5 April First Chicago NBD Corp. Banc One Corp 18616.85
6 August SunAmerica Inc. American International Group Inc 17799.90
7 July Crestar Financial Corp. SunTrust Banks Inc 9410.92
8 Nov. Bankers Trust New York Corp. Deutsche Bank AG (Deutsche
Financial Services) 8863.36
9 April Beneficial Corp. Household International Inc 8625.98
10 July Firstar Corp. Star Banc Corp 7889.68
11 March Ahmanson (H.F.) Inc. Washington Mutual Inc 6392.79
12 April Green Tree Financial Corp. Conseco Inc 5903.83
13 Nov. Provident Cos Inc. Unum Corp 4751.08
14 Feb. Corporate Property Investors Simon DeBartolo Group Inc 4530.00
15 August Textron Inc (Avco Financial
Services Inc.) Associates First Capital Corp 3900.00
16 April Corrections Corp of America CCA Prison Realty Trust 2815.69
17 Jan. USF&G Corp. St. Paul Cos Inc 2478.56
18 Feb. First Commercial Corp. Regions Financial Corp 2444.80
19 April Texas Utilities Co. (Peabody Coal) Lehman Brothers Holdings Inc 2300.00
20 Feb. Magna Group Union Planters Corp 2055.75
Source: Houlhan Lokey’s Mergerstat (www.mergerstat.com)
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