Things can only get better?

The Carlton/Granada deal will create a combined media company with a market capitalisation of approximately #2.6bn, and a company that will dominate the independent television sector. Commenting on the merger, Michael Green, chairman of Carlton, said: ‘One ITV has been a vision long time in the making. One company, with one management and one focus.’

At the same time, the Bank of Ireland and the National Australia Bank are both making advances towards Abbey National. The Bank of Ireland’s governor, Laurence Crowley, has been keen to stress the synergies between the two banks, which if combined would create the 13th largest company in the FTSE index.

But while these two bids may be keeping several teams of investment bankers, lawyers and accountants busy, such deals still remain scarce.

According to KPMG Corporate Finance and Dealogic, the value of global M&A deals for the first half of 2002 fell 56% compared to the same period last year – from $1,020bn (£661bn) to $448bn (£290bn). The UK echoed this decline, with deals down 52% by value and 39% by number to 1,127 deals totalling £44bn. And the picture is not set to improve for another year. According to Stephen Barrett, international chairman of KPMG Corporate Finance, the decline has continued, with the US being hardest hit, closely followed by Europe.

‘During 2002 we have seen a continued decline in M&A activity globally. We are now predicting we may bump along the bottom for several months yet,’ Barrett said.

‘But in Q3 or Q4 of next year we will see some tangible signs of a return in activity,’ he added. Barrett said that recently activity was ‘encouraging’ but did not constitute a trend. But he pointed to the Asia Pacific region where the decline in activity had levelled out as a possible sign that growth was around the corner.

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