THE DEAL FINDS CORPORATE EXECUTIVES ANTICIPATE MORE AGGRESSIVE ACQUISITION ACTIVITY IN THE YEAR AHEAD

September 8, 2003--New York, N.Y.--In The Deal's first survey of corporate decision makers on the role deals play in their companies' strategies, 55% indicated they expect their acquisition activity to increase more or much more in year ahead. In pursuit of a target, nearly half of the survey respondents say they would consider making a hostile bid if circumstances called for it.

The survey, conducted for The Deal by Erdos & Morgan, a market and media research firm since 1947, went out to more than 1,800 of The Deal's 20,000 corporate readers in August. The 207 respondents, primarily CFOs, presidents and heads of corporate or business development, hail from a variety of industries with a concentration in technology and manufacturing.

"This survey is another sign of how important we view the corporate sector in the deal economy," said Robert Teitelman, editor in chief.

When queried about factors motivating possible future acquisitions, 73% of the respondents say access to new markets was a primary reason. Industry consolidation was cited by 60% of the executives, and access to new technology and products followed closely, according to 56% of the executives.

The mounting strategic considerations for increasing acquisition activity may explain why nearly 50% say they would consider a hostile deal under some circumstances. Yet, slightly more than half of the respondents say they would never consider such an approach.

Recognizing that deals can fail, 85% of the executives believe the main reason for acquisitions faltering is lack of attention to post-merger integration, while 71% think overpayment contributes to deals falling short of expectations. In contrast, only 40% say attempts at "transformative" deals, when a merger changes the landscape of an industry, are a reason for deals not paying off.

The relatively recent rise in equity values did not influence the majority of respondents to seek out deals as only 37% say higher stock increases their willingness to consider an acquisition, and 48% claim that stock price is unimportant.

With the renewed interest in acquisitions, 85% of the survey respondents said they anticipate divestiture activity to remain about the same or be less active in the coming year. 

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