AT&T and T-Mobile deal: More mergers ahead?

After coming to a halt when the economy tanked in 2008, mergers and acquisitions are alive again. The $39 billion AT&T-T-Mobile deal announced made it official.

“We've seen M&A a upticking over the past three quarters,” says John Bender, a consultant who oversaw the $19 billion HP-Compaq deal in 2002. “The AT&T-T-Mobile deal is a good bellwether for optimism.” The deal is the largest since the beginning of the financial crisis. It will likely inspire more huge deals, says Charles Kane, an adjunct professor of international finance at the Sloan School of Management at the Massachusetts Institute of Technology in Cambridge, Mass. “I think this will trigger more M&A in the [telecommunications] space. [Competitors] may try to expand their business to answer the first shot.” Because telecommunications and technology are so interdependent, particularly since the advent of the smartphone, the AT&T-T-Mobile deal may trigger deals in technology sectors, Mr. Kane says. It may inspire other mergers and acquisitions in other industries, too.