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Our Outlook for the Telecom Sector

We think these five stocks will benefit from international telecom M&A.

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Mergers in the telecom world have exploded in the last couple of years. In 2006  Telefonica (TEF) closed on its acquisition of O2--the largest telecom acquisition in Europe since the telecom bubble burst in 2000. Sonaecom was recently thwarted in its tender offer for  Portugal Telecom (PT), which, if it had progressed, would have been the largest hostile deal in Portuguese history.  Vodafone (VOD) just agreed to acquire  Hutchison Telecommunications International's (HTX) 67% stake in its Indian subsidiary for $11.1 billion in cash. All of these deals were substantially above where the stocks traded before the deals were announced.

Allan C. Nichols does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.