2014 Merger and Acquisition Review
2014 was the best year for mergers since 2007 largely due to the consumer confidence over the health of the economy and speculation about its future growth. Overall, worldwide mergers and acquisitions valued over $3.4 trillion about $900 million behind the 2007 number. In the United States, from 2013-2014 we saw a 54% increase in money spent on mergers and acquisitions valuing at $1.5 trillion.
The biggest industries regarding M&A activity were mostly healthcare, telecom and technology. The combined three industries accounted for over $1 trillion. Experts expect shareholders to push their boards and officers for more deals in the coming year. The boost to the bottom line that comes with such dealings makes them attractive to those holding stake in a company. Many refer to the atmosphere of deal making as contagious, those who are not making deals feel they are going to be left behind so they start striking up deals. We may be in store for a surplus of M&A activity this coming year.
In the health-care industry we may be seeing a bump in deal making activity from the Affordable Care Act, coupled with the expiration of patents for a few prescription drugs that will soon move to generic versions.
What will be in store for the coming year? With 2014’s latest inversion tax block, many deals fell by the wayside, 3 out of 5 failing to finalize in the UK and Ireland. Speculation is swirling on both sides of the growth prediction for this coming year. Some think that due to the recent tax block, deals will slow down, especially in the healthcare industry. While others believe that the psychology behind striking deals will lead us into a deal making craze for 2015. Whatever the outcome may be, it will be an exciting year!
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