Q2 On Track To Be First $1 Trillion M&A Q Since 2007

The second quarter to date is the strongest since pre-Lehman with global M&A volume so far this quarter clocking $969 billion, points out a Bloomberg report.

Bloomberg Briefs in its “Mergers” report dated June 9, 2014 points out the strong performance in the second quarter M&A volume recalls heyday of 2007.

$10 billion M&A deals galore

Drawing reference to pre-2007 days, the Bloomberg report points out that in 2007, there were three $1 trillion-plus quarters on the way to a record annual total of $4.8 trillion, including proposed, terminated and withdrawn deals.

Since the M&A heyday of 2007, most quarters have topped out around $650 billion, with quarterly M&A having reached $1 trillion only six times in the last 12 years.

However, this quarter witnessed fifteen deals of $10 billion or more agreed to or reported to be in the works. Such mega deals have pushed up this quarter’s total dramatically. The following are some of the deals over $10 billion in second quarter:

$10 billion deals

Some of the prominent deals cited include AT&T Inc. (NYSE:T)’s agreement to buy DirecTV.

The report also highlights that the Sprint Corporation (NYSE:S)’s takeover of 100% of T-Mobile US Inc (NYSE:TMUS) would rank only eighth among telecom mergers. The following are the major telecom deals since 1997:

Largest telecom deals

The report points out that the Sprint-T-Mobile US deal only sounds big out of context, as even large deals such as Verizon Communications Inc. (NYSE:VZ)’s $130 billion deal last year to acquire Vodafone Group Plc (NASDAQ:VOD) (LON:VOD)’s 45% stake didn’t bring telecom deal levels back close to their 1999-2000 level. The following graph highlights that telecom M&A levels remain off peak levels:

Telecom deals off peaks

A closer look at last week’s deal-making

Last week’s deal-making rate fell behind the year-to-date and prior 30-day level, despite 11 new and amended deals over $1 billion being announced.

As can be deduced from the following graph, the report highlights that the financial and real estate sectors accounted for four of the 10 largest deals last week:

Dominance of financials and real estate

The report notes the following are the largest deals announced between May 31 and June 6:

Largest deals during last week

The report also highlights the following deal arbitrage in various deals expected to be completed in the near future:

Deal arbitrage