Global dealmaking in 2018 has already exceeded the $1trn mark, the fastest start to a year on record, say Eric Platt and James Fontanella-Khan in the Financial Times. Mergers and acquisitions (M&A) are on the rise everywhere, with the US leading the charge. It accounts for six of the top-ten global deals by value. Activity in Japan and Britain has more than doubled from a year ago. Global M&A activity is up 50% on a year ago.
The two biggest deals so far this year are US health insurer Cigna's $67bn takeover of pharmacy benefits manager Express Scripts and German utility Eon's acquisition of renewable-energy group Innogy for €43bn. Buoyed by economic growth and solid business confidence, bankers have signed a series of $10bn-plus deals in 2018. Last year's US tax cuts have added fuel to the fire as they've freed up capital to spend.
But is the boom morphing into a bubble? M&A is a coincident indicator, flourishing when investors and businesses feel confident due to a solid economic backdrop. It also tends to reach peaks as markets and economies turn, as highs in 2007 and 2000 illustrate. This time round, the M&A scene has felt toppy for some time. We have had four straight years with more than $3trn-worth of deals, while 2015 marked the latest peak year with almost $5trn of deals. The latest acceleration, perhaps ominously the fastest start to a year since 2000, feels like another sign that this long bull market will soon end.
Alice grew up in Stockholm and studied at the University of the Arts London, where she gained a first-class BA in Journalism. She has written for several publications in Stockholm and London, and joined MoneyWeek in 2017.
Nationwide: UK house prices creep up by 0.2% - are we heading for a rebound?
Nationwide’s latest house price index shows property prices inched up by 0.2% as demand warms up - will this trend go into 2024?
By Kalpana Fitzpatrick Published
December 2023 NS&I Premium Bond winners revealed - have you won the jackpot?
Two Premium Bond holders are now millionaires as NS&I reveals December winners. Find out if you’re one of them
By Vaishali Varu Published