Vodafone-Airtouch 42bn Astra Zeneca 22bn Vodafone, the UK leader in mobile phones, has aggressively moved to establish its worldwide position, acquiring US rival Airtouch for 42bn and creating a national US mobile network in a deal with Bell Atlantic. Among the old favourites, pharmaceuticals, high development costs of new drugs have driven many mergers this year, with Zeneca, a spin-off of ICI, reaching a 22bn merger deal with Swedish firm Astra to form one of Europe's biggest drug firms. The sector that many people believe will increasingly dominate the takeover stakes is financial services. The last decade has seen a technological revolution in the way services are delivered, with the telephone and the internet bypassing more traditional avenues of business. New entrants such as Virgin and the high street supermarkets together with a general trend towards globalisation have forced a major rethink among traditional banks.
Consolidation appears to be the name of the game both in the UK and worldwide.
Lloyds, which is the largest UK bank, has been one of the fastest movers, securing its position with some well-timed takeovers. In 1995 it took over TSB, then building society Cheltenham and Gloucester, and finally this year is buying insurance company Scottish Widows for 7bn. The single currency has boosted activity by making it easier for US and other European companies to do business across Europe. The euro has made it is easier for firms to raise cash to buy other companies as investors in the eurozone can lend money to companies without any currency risk. Low interest rates also help.