Global mergers and acquisition activity reached a record level of $3,324 billion (€3,399 billion) in 1999, representing a 32 per cent year-on-year increase, according to research released by JP Morgan.
Last year's level of corporate activity was more than double that recorded in 1997, the investment bankers said.
The strong level of activity augurs well for the current year with most observers expecting merger and acquisition activity to remain strong, particularly in Europe where corporate restructuring is expected to lend support to equity markets.
US activity, at $1,670 billion, was up by three per cent and, in value terms, just exceeded non-US activity, which rose by a more dramatic 84 per cent.
In sectoral terms, activity across telecoms, media and technology more than doubled to represent 41 per cent of all global mergers and acquisitions last year.
Pharmaceuticals and chemicals saw the next largest year-on-year increase at 40 per cent. Mergers and acquisitions involving European firms posted a particularly big increase, rising by 75 per cent to $1,479 billion last year and setting a new record for the fifth successive year. In terms of the types of deal done, JP Morgan found that mergers of equals rose 10 per cent to $259 billion and private equity deals increased by 58 per cent to $45 billion.
Although historically, just one third of European unsolicited bids have been successful, hostile bid activity exploded from $4 billion in 1998 to $337 billion in 1999.
Cash as an acquisition currency fell below 50 per cent of all deal values in Europe to 45 per cent for the first time in the 1990s, driven by the popularity and scale of mergers of equals. Total equity issued reached a record $155.2 billion in 1999 with technology and telecom firms representing 40 per cent of activity.
Italy led the way, followed by Germany and Britain.
Privatisations, at $51.4 billion, fell just short of the record set in 1998.
Some 63 per cent of this activity was concentrated in the last quarter and JP Morgan said it expected a record level of activity in Europe this year. Bid premia varied widely depending on country, consideration and bidder attitude. The range in 1999 was from zero in the case of the Rhone-Poulenc/ Hoechst merger to 58 per cent in BNP's unsolicited bid for Paribas.
