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Business appeared to be booming for the top companies in all sectors during 2007 if the list of mergers and acquisitions is to be believed. The number of companies bought and sold was certainly impressive, with 42 FORTUNE 1,000 corporations exchanging hands. This number of corporation buyouts had not been reached since the year 2000.

2007 was a huge year for mergers and acquisitions around the world. In the US alone, it was the single biggest year since the turn of the millennium, suggesting that many corporations actually faced tougher competition from their rivals than they were able to cope with or, alternatively and much more likely, that they faced financial difficulties as consumer spending begin to falter in line with the American economy and the credit crunch took hold. These factors probably lowered the selling price of the individual corporations that were the subjects of mergers and acquisitions but would have also made them vulnerable to corporate takeovers by larger and more dominant companies within the individual industries.

The majority of mergers took place in the sector of finance, healthcare, technology and energy, with the latter two attracting higher average selling prices for individual businesses. Mergers and acquisitions also took place in the utilities, capital goods, consumer staples, basic materials and consumer cyclicals sectors but the levels of the final buyout prices were nowhere near the level of those in the former sectors. However, in terms of the number of mergers and acquisitions, it was the consumer cyclicals sector that saw the majority of the action!

The top 10 mergers and acquisitions are listed below for ease of reference. Out of the ten, there were only two acquired by private equity buyers. The rest were the acquisition of corporate takeovers. They are listed in order, from the highest to lowest:

1. $85.6 billion – The acquisition of BellSouth by AT&T in the technological sector.
2. $35 billion – The acquisition of Burlington Resources by ConcocoPhillips in the energy sector.
3. $25.1 billion – The acquisition of Guidant by Boston Scientific in the healthcare sector.
4. $24.2 billion – The acquisition of Golden West Financial by Wachovia in the financial sector.
5. $21.3 billion – The acquisition of HCA by private equity buyers from Bain Capital, Merrill Lynch, KKR, Global Private Equity and the founder of HCA, Thomas F. Frist Jr. in the healthcare sector.
6. $16.2 billion – The acquisition of Freescale Semiconductor by private equity buyers from the Blackstone Group, Carlyle Group, Texas Pacific Group and Permira Advisers LLC in the technological sector.
7. $16 billion – The acquisition of Kerr-McGee by Anadarko Petroleum in the energy sector.
8. $13.6 billion – The acquisition of North Fork Bancorp by Capital One in the financial sector.
9. $11.7 billion – The acquisition of Lucent Technologies by Alcatel in the technological sector.
10. $10.5 billion – The acquisition of AmSouth Bancorp by Region Financial in the financial sector.

Whether the mergers and acquisitions boom will continue into 2008 is debateable, but as the credit crunch takes hold and the consumer spends less, it is likely that more companies will become vulnerable to takeover. Whether larger, more dominant corporations are willing to take the risk or not will determine the level of corporate takeovers this year.