Comcast Corp's $56 billion (€44 billion) unsolicited stock bid for Walt Disney Co is the latest sign that corporate takeover activity, which had slowed in recent years, is shifting into high gear.
Fuelled by a rising stock market and growing confidence in the economy, corporate deal-making is off to its fastest start in years.
Since the beginning of 2004, there have been $165.5 billion in deals announced, compared with $39.5 billion in the same period last year, according to Thomson Financial.
The deals have been across industry segments, with mega-deals in banking and entertainment leading the way.
Comcast's move this week underscores just how far the underdog US cable industry has come, when it surprised Wall Street and entertainment executives alike with its billion bid to gobble up Walt Disney Co.
The gambit represents the biggest step yet in the ascendance of cable, which last year surpassed broadcast television for the first time in attracting prime-time eyeballs.
Suddenly, Hollywood studios and major broadcast networks aren't the only ones playing starring roles in the consolidation of the entertainment industry.
"This says that Comcast is one of the biggest and most-powerful companies in the world," explained Mr Josh Bernoff, an analyst at Forrester Research.
The Philadelphia-based company provides service to 21.5 million American households, making it the United States' leading pay TV provider, with about a fourth of the market. Its stock market value, at $69.3 billion, exceeds Disney's $58 billion.
Yet as formidable a financial force as it is, Comcast has a hole in its operations, analysts say. The company is basically a pipeline for programming but creates very little content itself; its leading cable channel is E! Entertainment Television.
If it is to continue to grow and to fend off rivals - especially News Corp, which owns the Fox studios and late last year took control of satellite TV leader DirecTV - Comcast needs to own more programming itself. That's why Comcast chief executive Mr Brian L. Roberts has set his sights on Disney.
"Brian is an 800lb gorilla," said Mr Leo Hindery, who runs Yankee Entertainment and Sports Network. But, "he needs to look more like News Corp".
What nearly all of the big deals have in common - from the pending $58 billion merger of J.P. Morgan Chase & Co and Bank One Corp, to Comcast's bid for Disney - is that companies are seeking to make acquisitions using their own stock as currency.
"Stock deals are coming back now because people think their stock has a good valuation," said Mr Daniel D'Aniello, co-founder and managing director of The Carlyle Group. Chief executives "found themselves in a situation where they had the currency to start shopping again ... rather than wait for the recovery to fully value stocks. This is an opportunity to get in before the full recovery."
The flurry of deals, which experts say shows no signs of abating, has reached into the technology and telecommunications sectors as well. In recent days, Juniper Networks agreed to buy NetScreen Technologies by issuing $4 billion of its own stock.
Gateway agreed to buy eMachines, while the ongoing auction of AT&T Wireless Services raised the prospect of more high-profile consolidation in the wireless segment.
Mr Joe Laszlo, a senior analyst at Jupiter Research, said the AT&T auction has sparked talk of the possibility that T-Mobile USA and other carriers may soon be in play.
He said he regards the deals and chatter as a signal of greater confidence in the direction of the economy.
"Companies are seeing opportunities and seizing them aggressively. I see that as a good sign for overall economic growth," Mr Laszlo said.
"If you are an optimist, you look at this activity and say the economy is really going to get started again. And if you are a pessimist, you say we boiled over once and we are starting to overheat again."
There are other factors underlying the recent wave of mega-deal-making - not only early this year, but also in the fourth quarter of 2003, when Bank of America agreed to buy FleetBoston Financial for $48 billion in stock.
Big banks see the opportunity to grow geographically by using their own shares to buy financial institutions elsewhere in the US.
"The consolidation in the banking industry is going to be accelerating," said Mr Gerald Hanweck, a finance professor at the George Mason University School of Management.
"These companies have shown good earnings in the past; they are going to show good appreciation and a lot of them are ripe for takeover."
Mr Hanweck said that big banking deals are getting done without the acquirer offering a premium price. "There is still some degree of conservatism. We haven't reached the euphoric state yet."
That could change. The likely prospect for continued low interest rates, along with healthy growth in corporate productivity and profits, has left senior executives more confident about doing deals, experts said.
In addition, companies are no longer facing the uncertainty surrounding last year's US invasion of Iraq that led them to maintain a more cautious posture.
The deal flow in early 2004 is the second-biggest ever, according to Thomson Financial, following only the $314 billion in deals announced in early 2000.
If history is any guide, in the frenzy to avoid being left behind, some companies may end up overreaching.
"I think that over the next 12 months, you are going to see the return not only of big deals, but also more activity in Europe and maybe in Japan as well. Our gut tells us it is going to start moving again," Mr D'Aniello said.
"There may be some mistakes that are going to be made." - (Washington Post/LA Times service)
