Q2 M&A Continues 2014 Merger Mania

Q2 M&A Continues 2014 Merger Mania

The Bloomberg Brief Mergers published on Monday, July 7th, offered a break down of the second quarter numbers for the white-hot global M&A market. Bloomberg Brief editor John E. Morris highlighted a record $926 million M&A volume for the second quarter of 2014 in the overview of the report.

In fact, Morris thinks that merger mania is likely just getting started: “Combine [larger deals] that with rising valuations and the increasing proportion and scale of unsolicited bids, and the numbers bespeak a confidence that has been missing in boardrooms for the past four and a half years, since the dust from the financial crisis began to settle.”

2Q 2014 M&A numbers

Morris points out the second quarter M&A volume of $926 billion represents a level not seen since 2007. In fact, 2Q 2014 was the third biggest quarter since 2002 as per the value of agreed deals. Moreover, those figures don’t include the two biggest attempted blockbuster deals of the year: Pharma giant Pfizer Inc. (NYSE:PFE)’s $125 billion unsolicited bid for AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) and AbbVie Inc (NYSE:ABBV)’s $46.9 billion third-attempt to buy out Shire PLC (ADR) (NASDAQ:SHPG) (LON:SHP).

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Global M&A volume topped $1.62 trillion for the first half of the year. This represents nearly 70% of last year’s full-year total. The three largest deals in 2Q involved U.S. targets, which helped push North America’s share of the total global 2Q M&A activity to 53%.

The large size of deals is also notable

Merger Mania M&A

However, total deal volume is just one consideration in terms of overall M&A activity and the likelihood the merger mania will continue. Morris argues that the relatively large size of the deals this past quarter is equally important. He notes that 27 agreed deals of $5 billion or more and 18 over $10 billion were inked in the second quarter. He also points out that since 2002, there have been only three quarters when you have seen a greater number of $5 billion-plus deals and only two quarters when the deals were valued greater combined than the deals in the second quarter this year. Furthermore, all of those were finalized in 2006 and 2007.

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