Merger mania is at its feverish pitch. Not a single day passes without news on either some announced deal or whispers of a
potential combination. Twitter Inc (NYSE: TWTR) has now become the butt of M&A jokes, as it is perennially in the news
concerning one or another company purportedly being interested in it. Given the abounding M&A news, it becomes pertinent to
look back at October to see how the month has progressed.
Deal Value At Record
Estimates released by Dealogic show a record $251 billion worth of deals announced in
October, up from the previous record of $240 billion in July 2015, according to a US News article
referencing the Associated Press.
Some M&A Deals Announced In October
-
AT&T Inc. (NYSE: T) announces an
agreement to buy media giant Time Warner Inc (NYSE: TWX) in a $85 billion deal.
-
QUALCOMM, Inc. (NASDAQ: QCOM) is
set to buy NXP Semiconductors NV (NASDAQ: NXPI) for $38.50 billion.
-
General Electric Company (NYSE: GE) said it
would combine its oil and gas business with Baker Hughes Incorporated (NYSE: BHI) and spin it off as a separate public company, owned 62 percent by GE and 37.5
percent by Baker Hughes shareholders.
-
TeamHealth Holdings Inc (NYSE: TMH)
announced a deal to be bought by funds affiliated with Blackstone Group LP (NYSE: BX) for $6.1 billion in cash.
-
British American Tobacco PLC (ADR) (NYSE: BTI) has offered to buy the remaining stake it already does not hold in
Reynolds American, Inc. (NYSE: RAI) for
$47 billion.
Global Tech M&A On A Roll
Dealogic noted that global technology M&A volume at $530.5 billion in the year-to-date period is the second highest annual
total, trailing only the 2015 volume of $692.4 billion. Global semiconductors-targeted M&A volume hit an annual high of $127.1
billion in 2016, up 13 percent from the previous record of $112.2 billion set in 2015, Dealogic said.
Some Ditched Deals
Pfizer Inc. (NYSE: PFE) called off its deal
with Allergan plc Ordinary Shares (NYSE: AGN)
in April this year, citing the new rules of the Treasury called inversions, which took a shot at companies seeking to cut taxes
through M&A route. This scuttled a $160 billion-deal in the making.
In May this year, Halliburton Company (NYSE: HAL) had to abandon its offer for Baker Hughes, as it was not able to scale regulatory
hurdles in several continents due to anti-trust concerns involved.
The deal was valued at $35 billion.
What Influences The M&A Wave?
Companies usually look at M&A as a means of expanding market share or entering into new markets and verticals without having
to make substantial investments. Usually, this happens when companies see their sales and profits sagging for want of new
investment opportunity.
The low interest rate environment that prevails currently in the wake of expansionary policies pursued by the global central
banks also provides an avenue for cheap financing, giving them the leeway to chase deals.
That said, anti-trust concerns is a major deterrent, as governments try to protect sovereignty, citizens, shareholders and
consumers from a monopolizing environment.
Thus, companies make hay when the sun shines, creating ripples on the M&A front. With two more months to go, the year 2016
might take honor of being the sweet spot in deal activity.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.