Editor’s Letter : Not So Fast!

As Global Finance was going to press, details were emerging of JPMorgan Chases proposed $58 billion takeover of Bank One, which would be the biggest bank merger in the US in more than five years. No one is expecting this to be the last big merger in the financial services industry, and many are suggesting it is the tip of a very large iceberg.

Then, even before the ink was dry on the news reports about the return of the mega-merger, US phone giant AT&T; was announcing that it planned to sell its wireless divisiona move that analysts predicted would spark a wave of global mergers and takeovers in the telecoms industry.

These proposals have not come out of the blue. In our cover story this month we find that M&A; analysts across the board are predicting strong growth in the market. No one wants to say the boom times are back but, reading between the lines, there is clearly considerable excitement in the M&A; industry.

The recent dramatic run-ups experienced by many of the worlds equity markets are giving corporate executives the sort of confidence that makes them want to get out there and do some deals. For many companies those deals are long overdue. Strategic plans that made sense in 2000 and 2001 were shelved as the markets nosedived, but they still make sense now. Many companies have restructured, paid down debt, consolidated their businesses and cut costs; theyre now looking to grow, and the fastest way to do that is to go shopping.

A recent Thomson Financial poll of 1,301 business executives around the world found that 80% expect the M&A; market to continue to improve over the coming year and that almost a third expect their companies to make an acquisition in 2004.

While it is good to see such confidence, memories of the last great M&A; binge are still fresh in the mind.Admittedly, that flurry of paperbased deal-making was supercharged by the concurrent Internet and technology frenzy.We can only hope that this time around the mergers will be based not on hype or fashion but on good, rational business sense.

Dan Keeler