IT sector sees merger value growth


IT sector sees merger value growth
The information technology sector experienced a dramatic growth in the total value of merger and acquisition transactions during the first half of 2006, according to research firm Datamonitor.

Publishing its Technology Finance MarketWatch today, Datamonitor claims that the value of merger and acquisitions activity in the first half of 2006 rose 70 per cent year-on-year.

That growth comes despite a much more modest increase in the number of transactions, which rose from 507 in the first half of 2005 to 539 a year later.

"The breakdown of deals for the different technology sectors tracked on a daily basis reveals the telecoms sector scored big again this year, with 26 deals done to the value of almost $116 billion (£60.8 billion)," Tom Jowitt, senior analyst for technology finance at Datamonitor, revealed.

"That's broadly comparable with the situation last year, when the 25 deals we recorded in that sector made for the then highest total value of $43 billion (£22.5 billion)," he added.

Datamonitor has attributed the rise to a number of high-profile takeover bids, including venture capital firm Softbank's acquisition of Vodafone KK, Vodafone's Japanese operations, for $15.5 billion (£8.1 billion), as well as private equity firm Sonae's hostile $12.8 billion (£6.7 billion) ongoing bid for Portugal Telecom.

However it appears a much larger deal, by far the biggest in the sector, has helped push merger value growth up substantially.

US telecoms giant AT&T merged with domestic US rival BellSouth after an enormous $89.4 billion (£46.4 billion) takeover bid in March this year.

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