It is good that EC Mgt has chosen this most happening topic for October month's discussion. To answer these three questions, let me take them one by one:

1. I feel that corporations the worlds over have started thinking and working smarter than before and this is one of the main reasons why M & A are in a increasing trend. A few years' ago, companies were talking about diversification and tried every possible area where they could lay their hands on. This meant then that they were diversifying their risks too in business. But today, the corporations have started to be more focussed and the buzzword is that of integration. They do not want to face the grudges of another Asian crisis or a US boom and fall... This trend of being "focussed" on one's "core competence" is driving the companies to "acquire" all the required skills to be competent in their core area of business and also to integrate their input chains so that the flow is smooth and under their control.

2. In the next six to twelve months, I foresee M&A activities will be most happening in the Bio- technology and Chemicals related industry. The reason being, we are through with witnessing the banking companies go through this trend. The next most happening and challenge facing sector is this sector of Bio- technology ,the world over.

3. As already stated, the main reasons for M & A to happen have been the companies' trend into focus and core competence. One more reason that could be added to the list is that companies today want to eliminate competition that is unjustified with the results got on spending time and effort and hence tend to acquire these competiting firms so as to strengthen their stand. The less mortal-infant companies budge to this under pressure.

My Name: L Suresh
I am from: Chennai, Tamil Nadu, India.
My e mail ID: sureshlakshman@yahoo.com

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I believe the current wave of M&A's was inevitable. For the past few years, we have seen the birth of thousands of Internet companies, many without a sustainable profit model. It was clear that these companies could not survive beyond their initial funding and once sanity was restored in the investment community(as happened earlier this year), they would either have to fold or merge with another self-sustainable company. Also, many of these companies had a very narrow focus which will be more viable aggregated in a larger organization.

The second reason for the spate of M&A's is that from a VC's perspective, "selling" a funded entity looks much better than shutting it down.

I expect the current M&A activity to continue through the next12 months. There are still a lot of non-sustainable companies out there that received significant funding last year and haven't blown through it yet. Also, a number of "late-comer" investment groups are still being formed. Their initial desire, no doubt, was to cash in on the dot-com bandwagon. But, too late for that, I expect they will support funding for M&A's by some of the more viable entities looking to expand.

(P.N., Milpitas, Silicon Valley, CA)