Record Year for Merger Deals Winds Down

It remains to be seen if the approaching holidays will slow this year’s frenzied pace of mergers, but investment bankers and others say that if history is any guide this should be the last week of the century for major merger announcements.

Through Tuesday, there were 8,802 announced mergers involving U.S. firms in 1999, for a record total of $1.36 trillion in deal value, according to Mergerstat, a data service of Los Angeles investment bank Houlihan Lokey Howard & Zukin.

That’s a 15.5% increase in deal number from the same time last year and an 11% increase in total value, said Mergerstat, which tracks only the sale of businesses and not assets or divisions.

“Things normally slow down over Christmas,” said Andrew M. Gordon, a managing director with Goldman, Sachs & Co. in Los Angeles. “But with a public company, you can’t artificially slow things. If you are far enough along you will announce something--maybe not on the 24th [of December] but the 23rd or the 27th.”

The first half of December was busy, with 376 announced deals valued at $50.1 billion.

October had the highest dollar amount, with 746 deals valued at $188 billion, Mergerstat found, while June had the largest number of deals, with 862 combinations announced with a total value of $161.5 billion.

Some bankers say there has been a rush to get deals announced before the end of the year as underwriters vie for top rankings. So far, Goldman Sachs is leading, with 35% market share in deal volume, according to Thompson Financial Securities Data.

“There are a lot of mergers that have been on the plate that people are trying to cram in,” said David Greenspan of Clemente Greenspan & Co., a merger advisory firm in Glen Rock, N.J. “But I expect things to slow to a trickle next week.”

Still, Greenspan and others are tight-lipped about specific upcoming deals.

Bankers say concerns over the year 2000 computer bug have not been much of a merger impediment for their clients, even in the technology sector, as most firms claim they are certified Y2K-compliant.

“Y2K doesn’t seem to be impacting the global merger volume,”said Christopher Varelas, a managing director with Salomon Smith Barney in New York. “It doesn’t come up in conversation.”

But Varelas said bankers who are working on deals want to announce them before the last two weeks of the year.

“People clearly want to announce deals this week,” he said. “They want to make any announcement when investors are focused and they can get the attention of the market--not in the quiet days of the end of the year.”