NEW YORK -- The rising global economy, coupled with the sagging dollar, could make 1994 the second-busiest year for mergers and acquisitions.
The value of mergers reached $284.4 billion by Oct. 31, just short of the $292.2 billion set in all of 1989, according to Securities Data Co., of Newark, N.J.
That was the second biggest year for mergers, after 1988, when $335.8 billion worth of transactions took place.
Health-care reform, new communications technology and shrinking defense spending are spurring mergers worldwide.
U S West Inc. and AirTouch Communications are combining their domestic cellular businesses into a joint venture worth $13.5 billion. American Home Products Corp. is buying American Cyanamid Co. for $9.3 billion.
Lockheed Corp. and Martin Marietta Corp. are merging in a transaction valued at $5.2 billion.
Just last week, Quaker Oats Co. agreed to buy SnapplBeverage Co. for $1.7 billion.
"We're rolling," said Charles Murphy, co-head of investment banking at CS First Boston.
High stock prices, the improving economy, new technology and the increasing demand for services worldwide contribute to the rise in mergers, he said. "It's actually quite exciting."
The multimedia industry was the most active for mergers, Securities Data said. Telecommunications acquisitions accounted for $39.2 billion of transactions, while media companies were involved in $31.8 billion of mergers.
Mergers, which collapsed in 1990 and 1991, revived because acquiring companies is among the quickest ways to grow.
Purchases also are on the rise because the declining value of the dollar makes U.S. companies inexpensive for overseas buyers.
Roche Holding AG of Switzerland, for example, purchased Syntex Corp. for $5.3 billion.
The U.S. dollar fell 15 percent against the Swiss franc this year to 1.27 francs.
SmithKline Beecham PLC agreed to buy the Sterling Winthrop Inc. division of Eastman Kodak Co. for $2.9 billion. It also acquired United Healthcare Corp.'s Diversified Pharmaceutical Services Inc. unit for $2.3 billion. The British pound gained 9.4 percent against the dollar this year.
Transactions between U.S. and European companies more than doubled in the first 10 months of the year to $37.7 billion from $17.5 billion a year ago, Securities Data said. Mergers involving two U.S. companies increased 41 percent.
Goldman, Sachs & Co. was the most active adviser to corporations that completed mergers this year, working on transactions valued at $58.2 billion.
Salmon Brothers Inc. was second with $55.2 billion. Lazard Freres & Co. and its oversees affiliates were next, advising in $52.3 billion of mergers.