March madness is in full swing as basketball fans across the U.S. excitedly (or anxiously) watch the games. Hopefully your bracket has survived this weekend, despite a number of major upsets. As we wait for March Madness to resume this Thursday with the sweet 16, let’s turn our attention to another craze that is sweeping our nation: merger madness!
As of March 15 there were $308.3 billion in announced U.S. transactions, up 8% from the same period in 2014. While an uptick in activity comes as no surprise, this level of dealmaking is impressive. Only twice before has the year in U.S. M&A started off this strong.
M&A in healthcare and technology sectors has surged. Global pharmaceutical and biotechnology M&A has reached a high with nearly $70 billion in announced transactions – double the amount of 2014. Technology M&A also reached a 15-year high at $52.6 billion, a 4% increase from 2014 values.
Key drivers for robust M&A include improved economic conditions, high stock prices and confidence from executives and dealmakers.
Although dealmaker confidence levels are clearly high, they may actually have decreased from last year. According to a survey, only 54% of dealmakers believe 2015 will surpass the previous year’s M&A activity compared with 78% surveyed in 2014. To be fair, surpassing last year’s $3.5 trillion in announced deals may be difficult.
Either way, we can anticipate continued activity at significant levels. “Our perspective is that M&A is primarily confidence driven. It’s pretty high,” said Greg Weinberger, the Co-head of American M&A at Credit Suisse. More hostile M&A is also anticipated throughout 2015 as executives and shareholders aggressively pursue growth.
