While the incredible merger wave we experienced in recent years appears to have crested, don't expect calm seas - not in every industry, at least.Beginning in 1995, the Justice Department and the Federal Trade Commission were getting record numbers of "pre-merger notifications
But the wave peaked in 2000 with nearly 5,000 merger filings. Ever since, the number of mergers has been on a downward trend.
While the current slowdown is often attributed to economic factors, in some cases those same conditions will spur on the next wave of activity.
The slack global economy and sagging stock market have set many industries up for dramatic restructuring.
For example, the telecommunications industry is poised for widespread change. Many analysts believe that long distance and internet backbone companies are likely to provide the first examples of this restructuring.
Even with the promise of next generation technology "just around the corner,
falling rates, flattening subscriber growth, increasing debt loads, and dwindling stock prices all point to new combinations to keep that promise alive.
Analysts also feel that deregulation of the wireless industry will likely lead to significant consolidation in the near future.
Other industry changes will continue to be prompted by a different cost imperative - the need for large cash infusions to pay the high price of research and development. Whether it's biotech companies joining forces with other biotechs or large pharmaceutical companies buying up industry innovators and their pipeline portfolios, these industry mergers are destined to be on the rise.
But economic effects won't be the only force behind the next wave. The media industry is expected to experience a major shift. That's because the Federal Communications Commission is reexamining a host of old rules which prohibited common ownership of different types of media. This reexamination is spurred in part by recent federal court rulings. For example, one federal appeals court has just made it easier for networks to start acquiring a lot more TV stations around the country.
Additionally, cable companies were banned from owning TV stations in the same markets where they operated. But, under the court's ruling, the FCC will rethink those limits too. Current FCC chairman Michael Powell has made it clear that the old rules must be justified by today's facts or they will not stand.
So, that means companies like Viacom, AOL Time Warner, NewsCorp, Comcast, and Vivendi Universal will soon be shopping around, much the way station groups and networks began acquiring stations three years ago when the FCC gave them permission to own two stations in the same city.
Six years after the 1996 Telecom Act, the playing field is realigning.
We might see combinations between companies in the telephone, long distance, internet backbone, cable, and wireless industries that we have not seen before. Many analysts view this as a Telecom Act mid-term correction.
Economic conditions and changing legal landscapes are important variables to monitor in the merger speculation game. But in the public relations arena, one telltale sign of activity is the media buzz itself.
Watch as more analysts tout the need for consolidation in the telecom industry. Listen as technology gurus argue for greater infusions of cash to encourage greater technological advancements. And watch as experts argue that the public interest is not ill-served by eliminating the media ownership rules.
Communicating the value of any merger is vital to its success. And, now more than ever, most dealmakers see the need to condition the environment so it understands their transaction.
After all, it's critical to deal with the range of media, internal, political, and commercial challenges that arise even before a deal is announced.
And, that means getting the message out to a variety of stakeholders - a message that often finds its way into the pages of tomorrow's business sections.
So, following the media might just be the best way to determine the next wave to come.
Myron Marlin served as director of communications in the United States Department of Justice under Attorney General Janet Reno. He is now VP and a senior strategist at APCO Worldwide, a public affairs and strategic communications firm that specializes in corporate, litigation and crisis communications.