The global value of M&A activity rocketed to $1.75 trillion in the first six months of 2014, marking a 75% rise on the same period last year, it has been revealed.
European M&A have more than doubled since 2013, with $509 in deals announced so far this year. In Asia, the buying frenzy has sent deals soaring 85% to $327.8 billion, whilst the value of US M&A storms ahead, hitting $748.5 billion so far this year.
For the first time since 2007, international corporations are ditching the risk aversion and organic growth approach of the recession in favour of bullish buyout. Across Europe, Asia and the US, companies are adopting the attitude that growth can be more easily bought than built, says the Financial Times. The trend is consistent across all sectors apart from financial services, where increased regulation is thought to be keeping investors more cautious.
“The volatile world we are in is the new normal – there is always going to be an Iraq or a sovereign debt wobble about to happen somewhere,” said Peter Tague, Co-Head of Global M&A at Citi. “Increasingly, [companies] are deciding they have to deliver in that environment against a growth imperative that cannot be sustained through cost-cutting and organic activity alone. That leaves us feeling pretty good about the prospects for M&A.”
A total of US$4.88 trillion of debt has been sold so far this year reports Dealogic, close to the level of 2007 when US$4.91 trillion of bonds were issued over the same period.
The German industrial gases group has ended talks with its US peer on a potential union to establish a market leader.
The US exchange said it will introduce incentives from next month to make lower-volume exchange traded funds easier to buy and sell.
A survey of 1,000 merger and acquisition dealmakers finds that seven in 10 expect Brexit uncertainty to limit the number of deals.