M&A hits an eight-year high

A flurry of deals early this week has given the global mergers and acquisitions (M&A) market its strongest start to the year since 2007.

A flurry of deals early this week has given the global mergers and acquisitions (M&A) market its strongest start to the year since 2007. The value of worldwide M&A in the first three months of 2015 jumped by over a fifth to $811bn.

Health-care groups led the way, with America's largest health insurer, United Health, paying almost $13bn for pharmacy-benefits manager Catamaran, and Israeli drugmaker Teva spent $3.2bn on Auspex. US ketchup maker Heinz's $46bn takeover of foods group Kraft was the biggest deal of the quarter.

What the commentators said

Given that the recovery has been historically tepid, a key priority for many companies is "achieving growth in a low-growth environment", said Deutsche Bank's Paul Stefanick. Buying growth is especially important for Big Pharma, where many firms are seeing major drugs come off patent.

Companies are doing deals to acquire new drugs and investors have remained supportive even if valuations have looked high. An "eat or be eaten" mentality pervades the sector.

Energy could be next: lower oil prices have made firms vulnerable to being scooped up. And look out for more deals in Europe, which only accounted for $168bn of activity in the first quarter. The cheap euro will entice foreign buyers, reckoned JPMorgan's Hernan Cristerna.

Recommended

Why investment forecasting is futile
Investment gurus

Why investment forecasting is futile

Every year events prove that forecasting is futile and 2020 was no exception, says Bill Miller, chairman and chief investment officer of Miller Value …
21 Jan 2021
Why investors should beware of India’s surging stockmarket
Emerging markets

Why investors should beware of India’s surging stockmarket

The BSE Sensex benchmark index has soared by 90% since March, largely driven by foreign investors. But India's bull market is very vulnerable.
15 Jan 2021
US stocks are obviously in a bubble. But is it a rational bubble?
US stockmarkets

US stocks are obviously in a bubble. But is it a rational bubble?

Everyone wants to know if the US stockmarket is in a bubble. But that is the wrong question, says Merryn Somerset Webb. Of course it’s a bubble. The r…
14 Jan 2021
Yes US stocks are in a big bubble. But when will it burst?
US stockmarkets

Yes US stocks are in a big bubble. But when will it burst?

There are plenty of indicators to suggest that US stocks are in a massive bubble right now, says John Stepek. Here, he looks at what might pop it.
11 Jan 2021

Most Popular

Bitcoin: fool’s gold or the new gold?
Bitcoin

Bitcoin: fool’s gold or the new gold?

With bitcoin hitting new highs last week, and close to becoming a mainstream investment, is it really gold for the 21st century?
15 Jan 2021
Forget austerity – governments and central banks have no intention of cutting back
Global Economy

Forget austerity – governments and central banks have no intention of cutting back

Once the pandemic is over will we return to an era of austerity to pay for all the stimulus? Not likely, says John Stepek. The money will continue to …
15 Jan 2021
The MoneyWeek Podcast: bitcoin special
Bitcoin

The MoneyWeek Podcast: bitcoin special

Merryn talks to bitcoin experts Dominic Frisby and Charlie Morris to get the lowdown on the cryptocurrency to find out why it's such a huge global phe…
15 Jan 2021
Free 6 issue trial then continue to