This month has been the strongest January on record for megadeals

Thomson Reuters Logo

A flurry of megadeals has made this month the strongest January on record for massive mergers and acquisitions (M&A), according to Thomson Reuters data.

Unusually, 11 transactions valued at more than $5bn (£3.6bn) have been announced or completed already during the month, totalling an impressive $94bn.

Read more: UK leads the pack as Europe hits its highest level of buyout activity since 2007

The largest was Dominion Energy's $14bn merger with Scana in the US, but the UK appeared twice in the top 10 as Melrose's $10bn hostile bid for engineering giant GKN fell into fourth place and Informa's $6.1bn approach for UBM pulled in eighth.

Although the number of megadeals was more than has ever been seen in a January before, the combined value of the transactions was surprisingly unexceptional. They fell far short of the megadeal values in January 2011, when around $150bn worth of deals were announced or completed.

The first month of 2018 follows a strong end to last year, as Disney’s acquisition of Fox’s entertainment assets for $68.4bn grabbed the title of the largest deal of the year.

Read more: Global M&A activity to hit cycle high of $3.2 trillion next year

But the 11 months ahead could see more records smashed. Jana Mercereau, of business advisory Willis Towers Watson, said that increasing demand for tech assets could help push up prices while the US tax reform could encourage a proliferation of deals. Meanwhile the fragmented European media sector looks ripe for consolidation.

"In 2018, deal numbers are likely to pick up as interest rates begin to rise and the market benefits from greater clarity over the direction of US tax reform and Brexit," said Mercereau.

Read more: British firms set for M&A buying spree on scale not seen for a decade

Full story: This month has been the strongest January on record for megadeals: City A.M.

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...

Register for HITC Business News