Mergers and acquisitions reach highest volumes since the financial crisis

This year, mergers and acquisitions climbed to their greatest volumes since the height of the financial crisis.

 

Worldwide, the takeover deals amounted to $3.34tn in value – a 47 per cent increase compared with 2013. The last time they amounted to more than this was in 2007.

 

According to the Financial Times, the surge was driven by particularly low borrowing rates, inflated share prices and buoyant capital markets.

 

Wilhelm Schulz, head of M&A at Citigroup for Europe, Middle East and Africa, told them: “A clear theme of this year has been the need for large European companies to make acquisitions outside their main markets. That outbound M&A is likely to persist in 2015.”

 

Of all the sectors that experienced more takeovers than usual, energy had the busiest year. During the last two months alone, a number of high profile takeovers have taken place, such as oil services company Halliburton's acquisition of smaller rival Baker Hughes in November. The two companies signed the deal for $38.5bn.

 

But the value of this transaction reflects what some analysts believe to be a rise in size of deals, rather than an increase in number. According to data from Thomson Reuters, M&A activity climbed just 5 per cent compared to a year ago, indicating that most activity is taking place among larger firms rather than small to mid-sized ones. 

 

“The large deals are masking subdued growth in M&A activity,” commented Henrik Aslaksen, global head of M&A at Deutsche Bank.

 

 “The rate of growth of deal activity in the US is likely to normalise next year following a very strong 2014. However, we could see Emea activity pick-up from a comparatively low base.”