The coming M&A boom?

After going into the deep freeze post-Bubble, merger and acquisition activity may be poised for a sharp rebound, says Hewitt Associates. The human resources consultancy, based in Lincolnshire, Ill., surveyed 70 CEOs, CFOs, board members and vice presidents of corporate development and found that 53 percent of them plan to step up M&A activity.

Mark D. Arian, head of Hewitt's corporate restructuring and change practice, says the next upswing in M&A will start by the end of 2003 in these five sectors:

Telecom: "There is clear overcapacity," says Arian. "There is a game of chicken going on, to see which players are going to fall first." Only four or five telecom players may survive.

Food: It's still a very fragmented industry, certainly in comparison with many others.

Investment Banking: The bankers haven't been making many big deals since 1999-2000, so there is a lot of excess capacity in their sector.

Pharma: The never-ending pursuit of new products will continue to drive M&A among drug makers.

Media: The decision by the Federal Communications Commission to relax its rules on media-ownership is bound to unleash a wave of activity.

As always, psychology helps explain why M&A's will pick up. "Some clients are telling us, this is bottom fishing time," Arian says. "There are depressed prices out there." A whiff of capitulation is in the air.