Megadeals for 2015 hit record high
Source: Financial Times
The total number of giant deals this year has climbed to 47 — one short of the record in 2006, just before the financial crisis.
The dealmaking boom has coincided with an era of historically low interest rates, which was extended on Thursday when the US Federal Reserve decided not to tighten monetary policy, due to concerns over the outlook for global growth. That has allowed for cheap borrowing to fund large deals.
But if history is anything to go by, activity might well be at a peak. Data from Dealogic show that sustained dealmaking cycles from 1997 to 2000 and from 2005 to 2008 were followed by sharp stock market falls and a corresponding decline in M&A activity.
Despite the history, advisers in both the US and Europe are undeterred, saying they expect the pace of megadeals to continue across a number of industries.Paulo Pereira, partner at Perella Weinberg Partners, said: “At this point in the cycle, the question is whether discipline and cool heads will prevail. For now, most transactions we see are strategically sound, but they will be tested when the cycle inevitably turns.”
Read more: http://www.ft.com/cms/s/0/9ef27ce8-5d65-11e5-9846-de406ccb37f2.html#axzz3m6ylbrAK
T. Hartmann has been talking about this morning in relation to the 2016 election.
= new reply since forum marked as read
