How’s your summer? The financial market is set for a record-breaking summer this year, with global merger & acquisition volume hitting USD 4 tln since Jan. – reaching a new record.
I had a lovely summer! Why did they all do M&As this year?
Look at some numbers first. Up to now, global M&As have recorded USD 3.9 tln in volume, or nearly 40,000 transactions in number, up 26% from last year. Regional distribution? The US alone takes 60%, with Europe and Asia taking roughly ⅕ each.
- Why? They are taking advantage of low borrowing costs and their own skyrocketing share prices… Both sound attractive 🤔
- A special reason for the US: They all rushed to conclude their transactions before the new tax law – or they’ll need to pay 20% more.
We all love this! 🤩 Investment banks and law firms all love this, as they can earn more money from structuring and advising on those transactions. JP Morgan’s M&A fees have reached an all-time high.
Sorry, I’m a bit lost… Can you name me some of the biggest deals?
No problem. In case you are also curious about the industry – technology takes 20%, followed by financials’ 12% and industrials’ 12%. Three big ones 👇
- Grab, the Uber-like ride-sharing app in Southeast Asia, has announced to merge with a SPAC and go public in the US. (USD 40 bln)
- Square, Twitter’s payment sibling, acquired the Australian “buy now pay later” firm. (USD 29 bln – also the largest in Australia’s history)
- Amazon bought MGM, the studio behind James Bond, to compete with Netflix. (USD 10 bln).
+ SPAC, what? If you are new to finance: SPAC = Special Purpose Acquisition Company. It’s a shell company created to bring others public by going public first before acquiring them.