Will increased interest rates impact mergers and acquisitions? [Video]
These past two years have been huge for mergers and acquisitions. In 2014 over 5,000 deals were completed worth $1.5 trillion. That number is up from nearly 4,000 deals in 2013 totaling $940 million. In 2015, mergers and acquisitions will reportedly reach $4.3 trillion, which will break the previous record of $4.29 trillion set in 2007.
What will 2016 look like? While some companies may be skittish to make a deal based on the Federal Reserve’s move to increase interest rates, they shouldn’t be.
Many actually view increased rates as a positive sign the economy is stable. Further, the Fed only increased rates from 0 percent to .25 percent. It also indicated rate hikes will be gradual and based on the state of the economy. That’s great news for corporations that feel like they missed out on making a deal before rates increased.