Booming Markets Lead to Many Merger & Acquisition Huntings

According to Reuters, this year reports strong deals of mergers and acquisitions, topping the third highest annual level since the 2008 financial crisis. Many firms had negotiated large agreements even before the American tax reform would become law. This includes chipmaker Broadcom Ltd.’s take over of Qualcomm Inc. in an unsolicited deal of a cash and stock bid for $103 billion. About 80% of sold companies were approached by buyers rather than companies who decided to go on sale looking for possible purchasers. Many of these purchasers believe that they wouldn’t be facing competition as the threat of going public persuades them to aggressively pressure their targets confidentially.

This year, the number of merger and acquisitions totaled to about $3.54 trillion that was mostly driven by unsolicited takeover approaches. Last year’s $3.59 trillion is in line with this year’s total compared to the peak back in 2015 of a whopping $4.22 trillion. This is mostly due to the availability of high CEO confidence as well as the availability of cheap debt financing.

This year’s biggest acquisitions include CVS Health Corp’s $69 billion deal to purchase Aetna Inc., Walt Disney Co.’s $52 billion agreement to buy Twenty-First Century Fox Inc., and United Technologies Corp’s $30 billion deal to buy Rockwell Collins Inc.

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