lobal mergers and acquisitions activity has been running a record breaking pace so far this year.
That could all be about to change, according to Anu Aiyengar, cohead of North American M&A at JPMorgan, and Peter Tague, cohead of global M&A at Citigroup, who sat down with Bloomberg’s global deals editor Jeff McCracken to talk about the flurry of mergers and acquisitions deals.
M&A volume stands at around $US4.8 trillion for the year to date, up around $US100 million from the previous record high of 2007, according to Credit Suisse research.
Activity in North America is at $US2.4 trillion, up from $US1.6 trillion in 2007.
But the market volatility of the past few weeks could lead to a serious slow down in activity, as corporate chief executive put the brakes on deals.
“We’re tracking toward the year that could actually be the largest on record… given that we’re up about 40% 0n volume, it seems like it’s something that achievable,” Tague said. “Although if the market blinks, it may not get there.”
M&A deals this year have been driven by the huge transactions — those in excess of $US5 billion, he said.
“It boils down to, are the largest deals going to happen, and market volatility is the enemy of all deals, but large ones in particular,” he said.”M&A is largely driven by confidence.”
Aiyengar added that there should still be an all time high in North America, and that temporary volatility may result in changes to the make-up of deals, with more deals being paid for in stock than in cash.
She said the real question is how many new deals will get started now in the atmosphere of volatility, and “what does 2016 look like given how many new conversations start?”
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