November 24, 2014

2014 best year for M&A since recession

2014 has been a very good year for mergers and acquisitions. In fact, it's been the strongest year for M&A deals since before the recession, cemented by several high-profile mergers across multiple significant industries. In total, there have been almost 30 deals ringing in at more than $10 billion, and nearly 500 valued at $1 billion or more. USA Today reports that the total M&A for 2014 has skyrocketed to $3.1 trillion worldwide, up 52 percent from figures this time last year. 

With an economy defined by slow growth, many large corporations are using this time to increase market share and leverage, while smaller firms seek to cash in on a climate of absorption. After years of cautions dealings and conservative investing in long-term goals, executives have become bolder in their pursuit of dominance across pharmaceuticals, food production and technology industries. 

"When your competitor or a company that you think would add a complementary service to your business line gets cheap in the equity market because the stocks are down, it's a good time to use your financial strength to complement your portfolio," Phil Adams of corporate bond research firm Gimme Credit told the newspaper. "That's what makes the timing right."

Experts say the surge in M&A is a good way to boost top-line earnings, and to increase scale. Many corporations are striking while the iron is hot, rather than allowing this economic moment to pass by in stagnation. Conditions are as good for mergers as analysts have seen since 2008, encouraging more companies to consider expanding, consolidating and reorganizing their business models. Finding a company that has what your corporation needs can be the answer to cutting costs, reducing overhead and tackling new sectors of commercial prosperity.