Recent volatility hasn't dampened the urge to merge. On 9 September alone, $40bn worth of deals were announced worldwide, with a $12bn Hong Kong utility buyout leading the charge. August was the busiest month for mergers and acquisitions (M&A) in American history.
Asian M&A now stands at $700bn for this year, the second-fastest pace for this stage in the cycle on record. Deal making has been strong across the board, with insurers the latest sector in the spotlight. Last week Japan's Mitsui Sumitomo Insurance took over Amlin, a Lloyds of London insurer.
Globally, M&A looks on track to reach $4.58trn, eclipsing the 2007 record of $4.3trn, says JDSupra.com. The frenzy has been driven by firms' big cash piles, low interest rates making it cheap to borrow to buy rivals, and gradually rising confidence. More and more firms "are pushing ahead with contentious hostile [unsolicited] bids", adds James Fontanella-Khan in the FT, another sign of the "robustness of the M&A cycle".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
For example, pharmaceutical group Mylan has taken its offer for smaller rival Perrigo straight to the shareholders. There have been several short-term wobbles in the past few years, and none has seriously dented M&A. Unless the latest turbulence leads to "serious market disruption", deal-making should continue, notes Citi's Mark Shafir.
M&A follows the market, rather than leading it. Still, the two previous M&A peaks came before major downturns in 2000 and 2007. So all this dealmaking looks like another sign that the bull market is long in the tooth.
-
How much does it cost to move home under the Labour government?Home-moving costs are rising and could get more expensive once stamp duty thresholds drop in April 2025
-
What is the 25% pension tax-free cash - and when should you take it?The 25% tax-free cash that savers can take from their pension pots got plenty of airtime in the run-up to the Autumn Budget, with speculation that it could be cut or axed. But, what is it and how does it work?
