Monday, April 27, 2009

Merger: unsurprisingly given financial conditions M&A activity declined in 2008

[MocoNews] Global deal-making in the telecom sector fell sharply in the final quarter of 2008, with the total M&A count coming in at 129, compared to 192 a year earlier. Only four deals worth more than $1 billion occurred compared to 10 a year earlier, and public stock offerings fell from 14 in the final quarter of 2007 to just two in the final quarter of 2008—both carriers in the Middle East & Africa region, according to a report from Ovum.

“Private placements also fell, from 25 deals in 4Q07 to just six announced in 4Q08: five small ones, and a large one in Asia Pacific: Telenor’s $1.2B for a 60 percent stake in India’s Unitech Wireless. Venture financing was flat year-over-year in 4Q08 (deal count and value), with most funds targeting US-based vendor start-ups,” reports Cellular News.

Matt Walker, Ovum principal analyst and author of the report, said that the uncertainty in the global economy was an incentive to wait until expectations and valuations stabilize, and that M&A activity is likely to pick up again in late 2009, with deals concentrated in emerging markets after a couple of large ones in the US in 2008 (Verizon-Alltel and CenturyTel-Embarq).

Global Telecom M&A Fell In Fourth Quarter 08

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