Merger Meltdown; 1Q01 Worldwide M&A Volume Tumbles to $455 Billion; Lowest Since 3Q97 US Deal Activity Drops to Under $212 Billion Compared to $576 Billion in 1Q00 Goldman Sachs Tops in Completed Deals; Morgan Stanley Leads Announced Activity

Apr 03, 2001, 01:00 ET from Thomson Financial

    NEWARK, N.J., April 3 /PRNewswire/ -- After several years of
 headline-grabbing deals, historic transformations in various industries and a
 belief that no deal was too big, the M&A sector experienced a cold splash of
 water in its face as deal volume and value retreated to their lowest points in
 several years. According to statistics released by Thomson Financial,
 worldwide announced M&A volume slumped to under $455 billion on less than
 7,300 transactions in the first three months of 2001. That represents a nearly
 62% decline in dollar volume from the historic first quarter of 2000, when
 volume reached a record $1.172 trillion.  In the U.S., M&A activity suffered a
 similar downturn as volume retreated to under $212 billion on fewer than
 2,000 transactions.  This 63% drop in deal dollar value represents the slowest
 period since the third quarter of 1997 when activity was only $203 billion.
 
     INDUSTRY CHARACTERISTICS
     The leading sector for US-announced transactions in the first quarter
 2001 was insurance with $25.2 billion from 61 deals. However, most of that
 amount came from Prudential PLC's $24.7 billion bid for American General.  For
 the same period in 2000, the insurance sector tallied less than $9.9 billion
 in announced deals ranking it as the eleventh most active sector at that time.
 Oil and gas exploration followed with $17.1 billion from 57 deals this
 quarter. However, a year ago at this time, domestic M&A volume in the sector
 was $18.9 billion, which placed it in ninth place. Finally, in another example
 where a handful of deals pushed a particular sector into prominence, the food
 products group ended the first quarter 2001 as the third most active sector in
 domestic M&A with $16.2 billion. Nestle SA's $11.8 billion proposed
 acquisition of Ralston Purina and George Weston Ltd.'s $1.8 billion offer for
 Bestfoods Baking accounted for nearly 84% of the industry's total. In
 contrast, during the first quarter 2000 M&A volume in the domestic food sector
 totaled $2.64 billion and didn't even register in the top twenty-five leading
 sectors for that period.
     One example of a once "hot" sector that has cooled considerably is
 telecommunications. Between the fourth quarter 1997 and fourth quarter 2000,
 domestic quarterly M&A volume in the telecommunication area averaged
 approximately $51 billion.  This was marked by a record $94 billion set in the
 second quarter 1998 followed by over $91 billion in the third quarter 2000.
 However, it became apparent that many deals of the past were still
 experiencing "acquiring pains" and the drop in the share prices of many
 telecommunications companies made it difficult to potential acquirers to offer
 their shares as consideration. Thus, activity in this sector for the past
 period fell to under $7.5 billion. The lowest point since the fourth quarter
 1998 when activity totaled $6.94 billion.
 
     FINANCIAL ADVISORS
     Morgan Stanley ranked as the top financial advisor for announced worldwide
 M&A transactions during the first quarter of 2001.  The company worked on
 65 deals with an aggregate value in excess of $125.9 billion. Merrill Lynch
 was second with more than $95.4 billion in activity from 51 announced
 worldwide M&A assignments. Finally, JP Morgan was third with just under
 $90 billion. In terms of number of completed worldwide deals, Credit Suisse
 First Boston advised on 95 closed deals putting them in first place, while JP
 Morgan finished in second place with 84 concluded deals in the period.
 Goldman, Sachs ended first quarter 2001 with 79 completed worldwide deals and
 finished third.
     Based upon the dollar value of completed worldwide M&A deals, Goldman,
 Sachs was in first place during the opening quarter of 2001 with more than
 $330.6 billion in finalized deals. Salomon Smith Barney was second with over
 $270.5 billion while Merrill Lynch placed third with approximately
 $264.1 billion.
     Goldman, Sachs ranked first in completed U.S. M&A for the first quarter
 2001 with over $293 billion from 49 deals. Morgan Stanley followed with nearly
 $234 billion while Merrill Lynch ranked third with almost $230 billion in
 completed domestic M&A deals in the first quarter 2001. In terms of announced
 U.S. M&A deals in the first three months of 2001, Morgan Stanley ranked first
 for the quarter with just over $70 billion, Goldman Sachs was second with
 approximately $55.3 billion and Credit Suisse First Boston third with
 $49.8 billion.
 
     LEGAL ADVISORS
     Sullivan & Cromwell was the top ranked legal advisor based on completed
 U.S. M&A deals in the first quarter of 2001 with $307.8 billion from 27 deals.
 Dewy Ballantine followed with $258 billion from 27 deals while Skadden Arps
 ended the first quarter in third place with $ 227.9 billion in completed
 domestic M&A assignments. In terms of announced domestic M&A transactions
 during the first three months of 2001, Wachtell Lipton ranked first with more
 than $35.5 billion, Skadden Arps placed second with $34.1 billion and Cravath
 Swaine & Moore rounded out the top three with $31.59 billion, edging out
 Clearly Gottleib Steen & Hamilton.
 
     This Is A Final Release: Thomson Financial's Investment Banking and
 Capital Markets (IB/CM) group is the leading global provider of data,
 commentary, and analysis in the financial industry.  We provide authoritative
 and indispensable information with the quality and breadth not available
 anywhere else.  Our information includes Investext broker research, IFR
 capital markets analysis, SDC data on corporate financial transactions, and
 WorldScope company fundamentals.  This information, accessible through a
 comprehensive host of products, provides our clients with a customized
 solution to their data needs.  For more information on Thomson Financial IB/CM
 group, visit http://www.tfibcm.com.
 
     Contact:  Richard J. Peterson, 973-645-9701, for Thomson Financial.
 
 

SOURCE Thomson Financial
    NEWARK, N.J., April 3 /PRNewswire/ -- After several years of
 headline-grabbing deals, historic transformations in various industries and a
 belief that no deal was too big, the M&A sector experienced a cold splash of
 water in its face as deal volume and value retreated to their lowest points in
 several years. According to statistics released by Thomson Financial,
 worldwide announced M&A volume slumped to under $455 billion on less than
 7,300 transactions in the first three months of 2001. That represents a nearly
 62% decline in dollar volume from the historic first quarter of 2000, when
 volume reached a record $1.172 trillion.  In the U.S., M&A activity suffered a
 similar downturn as volume retreated to under $212 billion on fewer than
 2,000 transactions.  This 63% drop in deal dollar value represents the slowest
 period since the third quarter of 1997 when activity was only $203 billion.
 
     INDUSTRY CHARACTERISTICS
     The leading sector for US-announced transactions in the first quarter
 2001 was insurance with $25.2 billion from 61 deals. However, most of that
 amount came from Prudential PLC's $24.7 billion bid for American General.  For
 the same period in 2000, the insurance sector tallied less than $9.9 billion
 in announced deals ranking it as the eleventh most active sector at that time.
 Oil and gas exploration followed with $17.1 billion from 57 deals this
 quarter. However, a year ago at this time, domestic M&A volume in the sector
 was $18.9 billion, which placed it in ninth place. Finally, in another example
 where a handful of deals pushed a particular sector into prominence, the food
 products group ended the first quarter 2001 as the third most active sector in
 domestic M&A with $16.2 billion. Nestle SA's $11.8 billion proposed
 acquisition of Ralston Purina and George Weston Ltd.'s $1.8 billion offer for
 Bestfoods Baking accounted for nearly 84% of the industry's total. In
 contrast, during the first quarter 2000 M&A volume in the domestic food sector
 totaled $2.64 billion and didn't even register in the top twenty-five leading
 sectors for that period.
     One example of a once "hot" sector that has cooled considerably is
 telecommunications. Between the fourth quarter 1997 and fourth quarter 2000,
 domestic quarterly M&A volume in the telecommunication area averaged
 approximately $51 billion.  This was marked by a record $94 billion set in the
 second quarter 1998 followed by over $91 billion in the third quarter 2000.
 However, it became apparent that many deals of the past were still
 experiencing "acquiring pains" and the drop in the share prices of many
 telecommunications companies made it difficult to potential acquirers to offer
 their shares as consideration. Thus, activity in this sector for the past
 period fell to under $7.5 billion. The lowest point since the fourth quarter
 1998 when activity totaled $6.94 billion.
 
     FINANCIAL ADVISORS
     Morgan Stanley ranked as the top financial advisor for announced worldwide
 M&A transactions during the first quarter of 2001.  The company worked on
 65 deals with an aggregate value in excess of $125.9 billion. Merrill Lynch
 was second with more than $95.4 billion in activity from 51 announced
 worldwide M&A assignments. Finally, JP Morgan was third with just under
 $90 billion. In terms of number of completed worldwide deals, Credit Suisse
 First Boston advised on 95 closed deals putting them in first place, while JP
 Morgan finished in second place with 84 concluded deals in the period.
 Goldman, Sachs ended first quarter 2001 with 79 completed worldwide deals and
 finished third.
     Based upon the dollar value of completed worldwide M&A deals, Goldman,
 Sachs was in first place during the opening quarter of 2001 with more than
 $330.6 billion in finalized deals. Salomon Smith Barney was second with over
 $270.5 billion while Merrill Lynch placed third with approximately
 $264.1 billion.
     Goldman, Sachs ranked first in completed U.S. M&A for the first quarter
 2001 with over $293 billion from 49 deals. Morgan Stanley followed with nearly
 $234 billion while Merrill Lynch ranked third with almost $230 billion in
 completed domestic M&A deals in the first quarter 2001. In terms of announced
 U.S. M&A deals in the first three months of 2001, Morgan Stanley ranked first
 for the quarter with just over $70 billion, Goldman Sachs was second with
 approximately $55.3 billion and Credit Suisse First Boston third with
 $49.8 billion.
 
     LEGAL ADVISORS
     Sullivan & Cromwell was the top ranked legal advisor based on completed
 U.S. M&A deals in the first quarter of 2001 with $307.8 billion from 27 deals.
 Dewy Ballantine followed with $258 billion from 27 deals while Skadden Arps
 ended the first quarter in third place with $ 227.9 billion in completed
 domestic M&A assignments. In terms of announced domestic M&A transactions
 during the first three months of 2001, Wachtell Lipton ranked first with more
 than $35.5 billion, Skadden Arps placed second with $34.1 billion and Cravath
 Swaine & Moore rounded out the top three with $31.59 billion, edging out
 Clearly Gottleib Steen & Hamilton.
 
     This Is A Final Release: Thomson Financial's Investment Banking and
 Capital Markets (IB/CM) group is the leading global provider of data,
 commentary, and analysis in the financial industry.  We provide authoritative
 and indispensable information with the quality and breadth not available
 anywhere else.  Our information includes Investext broker research, IFR
 capital markets analysis, SDC data on corporate financial transactions, and
 WorldScope company fundamentals.  This information, accessible through a
 comprehensive host of products, provides our clients with a customized
 solution to their data needs.  For more information on Thomson Financial IB/CM
 group, visit http://www.tfibcm.com.
 
     Contact:  Richard J. Peterson, 973-645-9701, for Thomson Financial.
 
 SOURCE  Thomson Financial