The value of mergers and acquisitions has hit an all-time high following the $13.9bn takeover of the US coffee company Keurig Green Mountain by Germany’s Reimann family.
The total for all deals so far in 2015 reached $4.614tn (£3.066tn) on Monday, surpassing the previous record of $4.610tn in 2007 on the eve of the financial crash, according to the financial data company Dealogic. The record was set despite a reduced number of deals completed, 18,603, compared with 23,577 in 2007.
The average deal value in 2015 was worth just more than $1bn, with more than twice as many “megadeals” of $50bn or more as last year.
At the top of the list is the recently announced $160bn bid from the pharmaceutical group Pfizer for Allergan, the maker of Botox. Other megadeals include the $117bn AB InBev acquisition of SABMiller and Shell’s $81.5bn bid for BG Group, which has yet to be completed.
With three weeks to go until the end of the year, there is potential for further deals. But on the other hand some that have already been announced might not complete.
Bankers say that a number of factors have contributed to the record-breaking figure. Lower interest rates have made equity fundraising more attractive; the relatively weak euro has made company values comparatively cheap; and there has been a focus on strategic deals to increase market share through takeovers and mergers.
Deal activity in the UK has not been quite as strong as in the US and Asia, but bankers say there have been signs of life with two of the world’s top deals, the bids for SABMiller and BG.
Looming interest rate rises in the US could hold deal activity back next year. A number of experts, however, believe that if the rises are not too steep deal activity will not be knocked off course.
This article was written by David Hellier, for theguardian.com on Monday 7th December 2015 19.27 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010