M&A boom as deals up 35 pc on 2013
Global M&A volume was up 35 per cent in the six months of 2014, the biggest first-half of a year for dealmaking since 2007, according to data from Dealogic.
The figure for mergers and acquisitions globally reached $1.75 trillion in the first half of 2014, an increase of 35 per cent from $1.30 trillion last year. The last time the figure was higher was in the frothy days before the financial crisis, where $2.59 trillion worth of deals were struck in the six months to July 2007.
In the second quarter of this year there were 13 deals involving $10bn or more, totalling $368.2bn. This is almost five times the $74.1bn announced for the same period last year and the highest quarterly volume since 2007.
Companies have a real incentive to buy as interest rates are low and financing is still cheap.
The average deal size so far this year stood at $218m.
Global cross‐border M&A made up one third of total deal volume, up 76% on the first six months of 2013.
There were 5,615 deals in Europe and the Middle East (EMEA) region at a total volume of $502.3bn, up 22 per cent from the same period last year.
Global M&A volume comparison. Source: Dealogic
Healthcare and tech lead the way
Healthcare and technology companies dominate this year. The healthcare sector account for 18 per cent of M&A volume, led by Canada’s Valeant Pharmaceuticals International bid for Allergan at $62.4 billion.
Technology M&A reached $133.1bn, up 43 per cent from the same period in 2013 and the highest first half volume since 2000. Facebook ’s $19.4bn bid for messaging application WhatsApp is the biggest technology deal announced so far this year.
Global M&A volume by sector. Source: Dealogic
Goldman Sachs bankers advised on $600bn worth of deals so far in 2014, ranking top also in terms of wallet share with 10.6 per cent of fees. In the UK, Citi tops the list with $90,152m worth of announced deals.
While these figures are the best for the last six years, the outlook for the rest of the year is just as rosy.
"Our outlook for equity markets for the remainder of the year is positive. M&A has made a welcome return in recent months," Mark Burgess, chief investment officer at Threadneedle Investments, told Reuters this morning.