Convergence of the U.S. Communications Industry: M&A Trends Analysis in the Early 2000s

Technology development, fierce competition and deregulation have transformed several divergent communications markets into a converged market. Digital convergence encourages mergers and acquisitions (M&A) between companies in different areas. This study postulates that the trends of these M&As represent the changes of the converging market. From data collected during 2001‐2004, the trends of M&A are investigated. Mergers within industry and between industries are examined. Using cluster analysis, the pattern of mergers in the communications industry is scrutinized. Results show that merger within an industry is still dominant against mergers between industries, although merger between industries is becoming significant. Telecommunications companies occupy central positions in this changing market of mergers. Discussions about that phenomenon are presented from the view of digital convergence.