“By his own admission, William B. Harrison would have been vilified for negotiating a merger a year ago,” writes Andrew Sorkin in today’s New York Times.

“Not only was Mr. Harrison, chief executive of J. P. Morgan Chase, still trying to justify the deal that brought J. P. Morgan and Chase Manhattan together, he was under fire for missteps that linked the bank to corporate scandals and what he described as ‘the populist backlash against corporate America.’ “

“So it was something of a surprise that J. P. Morgan made another big acquisition last month, agreeing to buy Bank One for $58 billion in stock. More surprising still was the reaction: investors cheered.”

“With the economy improving and memories fading of the disastrous deals during the last stock market boom — combinations like America Online and Time Warner and Vivendi and Seagram — big-time Wall Street deal making is back.”

“The successful 11th-hour offer last week by Cingular Wireless to buy AT&T Wireless for $41 billion in cash was the largest all-cash deal in history, eclipsing the acquisition of RJR Nabisco by the buyout firm of Kohlberg, Kravis Roberts for more than $25 billion in 1988, when corporate raiders were financing deals with the aggressive use of junk bonds.”

“Likewise, the Comcast Corporation’s audacious $54 billion hostile bid for the Walt Disney Company seems to signal the beginning of a new cycle of merger mania. Though the investment banking and law firms are not hiring in droves yet and the celebratory closing dinners are more Ruby Foo’s than Nobu, there is a palpable sense that heady days are here. And that feeling has given a lift to stocks and generated speculation about all kinds of deals that would not have been possible a year ago.”

” ‘People are looking at expansion again,’ said Brian L. Roberts, chairman and chief executive of Comcast, explaining that a year ago he was hamstrung by his focus on integrating AT&T’s cable business and by a lagging Comcast stock price.”

“So what has changed?”

“Executives and bankers cite an improving economy, the stock market recovery in recent months and a little more certainty in the world.”

” ‘There’s a one-word answer: confidence,’ said Roger C. Altman, chairman of the investment banking boutique Evercore Partners and a former deputy Treasury secretary in the Clinton administration. ‘If your own business is flat or worse,’ he said, referring to the difficult economy in recent years, ‘it’s difficult to say to shareholders that the right thing to do is this big combination.’ “

“Of course, business history is littered with failed mergers, and academic studies have long suggested that fewer than half of all deals work. Some experts argue that the current confidence in the boardroom may be misplaced.”

” ‘You would think that they would do these deals when the markets are down and things are cheap,’ said Bruce Greenwald, a professor of finance at Columbia Business School. ‘It’s crazy. It’s countercyclical. As soon as the markets start to perform, all of a sudden they can get away with this.’ “

“Still, for better or worse, confidence seems to have returned with abundance. Some companies, with their share prices up, are now willing to use stock to make acquisitions. Since the beginning of the year, corporate marriages worth more than $370 billion have been made — or at least proposed — worldwide, outpacing the volume of deals in 1999, according to Thomson Financial, a firm that tracks mergers.”