It's merger time once again in the tech world, and this time we're talking BIG mergers.
The first merger came to a head last week when Cingular Wireless placed a winning bid to acquire AT&T Wireless Services (NYSE: AWE) for $41 billion.
Owned by SBC Communications (NYSE: SBC) and BellSouth (NYSE: BLS), the combined Cingular/AWE would vault to the No. 1 cellular service provider position in the United States with roughly 46 million customers, more than nine million more customers than Verizon Communications (NYSE: VZ), the previous market leader.
The merger will also narrow the number of true national wireless providers to five, with Sprint PCS Group (NYSE: PCS) at No. 3; T-Mobile, the mobile phone unit of Deutsche Telekom (NYSE: DT) at No. 4; and Nextel Communications (Nasdaq: NXTL) at No. 5.
Also on the bidding block is The Walt Disney Co. (NYSE: DIS), as Comcast (Nasdaq: CMCSA), the No. 1 cable operator in the United States, floated a hostile takeover bid of $54 billion in stock for the beleaguered entertainment/communications giant.
A combined Comcast/Disney would become the largest media company in the world, as it would meld Comcast's 21 million cable subscribers with the various Disney properties/movie studios, as well as the ABC and ESPN networks.
Under the tutelage of Chief Executive Michael Eisner, Disney has drastically under performed during the past half decade or so, a fact exacerbated lately by the tourism drop following the terrorist attacks of 9/11 and the advertising revenue contraction caused by the recession of 2000-2002.
Comcast's bid to acquire Disney became public roughly a week and a half ago after Eisner rebuffed private talks with Comcast Chief Executive Brian Roberts.
Although Disney's board rejected Comcast's initial offer last week, this proposed deal is not dead yet, in part because of the efforts of former Disney board member — Roy Disney — to oust Eisner and several other board members.
That said, anything north of a 15 percent vote against Eisner would likely be viewed as a blow against both him and the company.
In the meantime, don't expect much more than posturing by any of these parties between now and March 3, the day of Disney's annual shareholders meeting.
On a local level, the Cingular/AWE deal will likely result in short-term opportunities for better cellular pricing plans here in Utah and around the country as competitors seek to leverage any market confusion to their benefit prior to the expected year-end closing of the acquisition.
On the other hand, the creation of a Comcast/Disney behemoth would likely trigger the beginning of the end of what I have previously termed The Convergence Decade within the "Utah Tech Watch" column.
Such a merger would become a tipping point I expect would cause other mega-mergers among technology, communications and entertainment conglomerates.
Regardless, such mega-mergers tend to have an unintended ripple effect as other companies see the synergies and values that can be created through merged firms, which gets executives and board members alike thinking seriously about similar opportunities for them and their companies.
Hence I expect several Utah tech/life science companies to get bought or merged in 2004 or to become acquiring parties during this election year.
For example, South Jordan-based Headwaters (Nasdaq: HDWR) announced Thursday it is acquiring VFL Technology of West Chester, Pa. for $29 million in cash and debt.
The VFL acquisition is expected to bolster Headwaters' energy and chemical technology businesses, while also boosting its top and bottom lines.
Other Utah technology firms I believe could be on the prowl for acquisition candidates in 2004 include Altiris (Nasdaq: ATRS), Merit Medical (Nasdaq: MMSI), Novell (Nasdaq: NOVL) and Overstock.com (Nasdaq: OSTK), just to name a few.
Regardless, 2004 is already beginning to shape up as an interesting year on the mergers & acquisition front.
David Politis leads Politis Communications, a public relations, investor relations and marketing communications agency specializing in the high-tech and life science markets.
E-mail: dpolitis@politis.com.