The M&A party is almost over

Share

• Copy link
• Facebook
• X
• Linkedin
• Whatsapp
• Pinterest

Share this article

Join the conversation

Follow us

Add us as a preferred source on Google

Newsletter

Get the MoneyWeek Newsletter

Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Contact me with news and offers from other Future brands Receive email from us on behalf of our trusted partners or sponsors

---

By submitting your information you agree to the Terms & Conditions and Privacy Policy and are aged 16 or over.

You are now subscribed

Your newsletter sign-up was successful

---

Want to add more newsletters?

Twice daily

MoneyWeek

Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Signup +

Four times a week

Look After My Bills

Sign up to our free money-saving newsletter, filled with the latest news and expert advice to help you find the best tips and deals for managing your bills. Start saving today!

Signup +

---

An account already exists for this email address, please log in.

Subscribe to our newsletter

Last year turned out to be the second-best for global mergers and acquisitions (M&A) since 2007. The total volume of M&A for 2016 was $3.6trn, a 17% drop from 2015's record $4.37trn.

The US accounts for around half of dealmaking, and there the outlook is auspicious. President-elect Donald Trump is hoping to encourage US firms to bring back some of the money they have stockpiled overseas to avoid taxes. If his tweak to the tax code works, much of the money seems likely to be spent on acquisitions. And "apart from available funds, the other big driver of M&A is CEO confidence", says Brooke Sutherland on Bloomberg.com. The Trump-induced rally thus bodes well.

Still, valuations are getting pricier, and the prospect of rising US interest rates may temper enthusiasm given how much of the M&A boom has been based on rock-bottom borrowing costs, making it cheap to borrow to snap up rivals. The broader problem is that the equity rally could rapidly reverse if Trump opts for protectionism or if the euro crisis returns. The M&A party "isn't over", reckons Sutherland, "but it's getting long in the tooth".

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues 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

Sign up