Mergers Slow In 2002; Better 2003 Expected

Compiled ByTonya Vinas Both the United States and Europe experienced fewer mergers and acquisitions (M&A) in 2002, with a smaller number of "mega-mergers" to boot. Mergerstat LP, Los Angeles, reports that total announcements of U.S. deals reached 7,387, making it the sixth-best year since 1962, when the company first began tracking M&A activity. However, 2002 fell short of the 8,545 deals announced in 2001 and the 11,123 announced in record-breaking 2000. In addition, the dollar value of M&A transactions in 2002 declined sharply, from $683 billion in 2001 to $441.3 billion. In 2002, just 68 deals were worth more than $1 billion, compared with 119 in 2001. The overall value of these big deals was $223.5 billion last year, versus $401.2 billion in 2001. In Europe, dealmakers recorded 7,704 transactions, compared with 8,871 the prior year. Like the U.S., the value of those deals also declined: US$417.7 billion vs. $676.4 billion. In its annual report, Mergerstat noted the growing emergence of private equity buyers in the second half of 2002, saying it "bodes well for the M&A market in 2003."