Mergers Expected to Be Smaller in 1990s

Say farewell to megadeals such as last year’s record-setting $25-billion buyout of RJR Nabisco. For the next few years, experts say, mergers will be smaller, strategically motivated and done almost solely by companies with strong balance sheets.

“The merger movement is not dead; it’s just hunkering down,” said Samuel Hayes, professor of investment banking at the Harvard Business School.

The value of U.S. mergers plunged to $185.9 billion in the first 10 months of 1990 from $373.4 billion in the same period of 1989, IDD Information Services says.

While some large deals are being discussed, those actually announced this year have tended to be small, especially when compared to some of the big 1980s takeovers.