Tasty Morsels At The Feeding Frenzy

If you failed to catch 1994's fast-moving takeover express, make sure to be around for 1995's big ride. The coming year will witness yet another wave of buyout deals, regardless of how the stock market swings. So say some smart-money pros, who expect action in the banking and retailing, health-care and pharmaceuticals, and food and entertainment sectors. Ditto for aerospace, gaming, and technology.

Takeovers will continue, "but in a more frenzied and bigger way," argues E. Michael Metz, chief investment strategist at Oppenheimer & Co. What fueled mergers and acquisitions in 1994--pressure on companies to widen distribution networks, increase product lines, and expand technological reach--are still factors, Metz says. This time, the pace will accelerate even more to surmount the stiffening competition worldwide. "Many companies that have been building up cash hoards and sprucing up balance sheets consider it still strategically sound to buy other companies as a means of expanding their horizons," explains Metz.