January 5, 2016

Global mergers and acquisitions shatter previous $4.29 trillion record

2015 was a record year for mergers and acquisitions as total deals hit $5 trillion.

Mergers and acquisitions hit an all-time high in 2015 as the total value of deals hit $5 trillion. Deal value increased 37 percent from 2014. The previous record was $4.29 trillion set in 2007. The $5 trillion also shatters analysts' expectations for 2015, which were set at $4.3 trillion. And, just as impressive, the fourth quarter of 2015 scored the highest figure of any single quarter on record.

What a year.

Many credit the Fed's pending and eventual hike in interest rates as the main reason companies completed deals in record-setting fashion. They wanted to take advantage of a good buying situation. Some of the largest deals of the year include:

  1. Intel acquired Altera for $16.7 billion to expand its product line to include Altera products, such as programmable logic devices and highly integrated power devices.
  2. Pfizer acquired Hospira for $17 billion for the latter's impressive portfolio that includes generic acute-care and oncology injectables, biosimilars and integrated infusion therapy.
  3. AbbVieacquired Pharmacyclics and Imbruvica for $21 billion to help it quickly become a leader in cancer treatment and position itself better in the market of hematological oncology.
  4. Avago Tech acquired Broadcom for $31 billion to become a leader in the semiconductor industry.
  5. Charter Communications acquired Time Warner Cable for an incredible $78 billion to create one of the world's largest cable television and broadband internet providers.

Going forward, some analysts predict that mergers and acquisitions will slow down because the Fed increased rates. However, those rates were small and there is little indication they will jump significantly. Expect mergers and acquisitions to be strong in 2016.