Drivers of Mergers and Acquisitions in the Telecommunication Industry: The Differences between Blockbuster and Small M&As

Although many major, blockbuster mergers and acquisitions (M&As) in the telecommunications industry have attracted much attention from both the popular press and the media economic research community, small M&A deals in fact constitute the vast majority of business expansion activities in the telecommunications industry. Utilizing the data obtained from the Zephry database for over 2500 M&A cases involving U.S telecommunications companies, this study compares small and large blockbuster M&As in several aspects and analyzes whether several factors that have been shown to influence valuation of large M&As tend to affect small M&As to the same extent. According to the regression analysis, those factors, including financial market dynamics, M&A activity momentum, types of business expansion, and the involvement of foreign companies, influence the valuation of both small and large M&As. However, the direction and magnitude of the influences are quite different among small M&As.