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Category: Market Commentary Tags: , ,

If you’ve picked up on the news stories regarding mergers and acquisitions this month, you’re on to something – whether it’s AT&T’s bid for Time Warner or today’s announcement of GE seeking to combine its oil and gas business with Baker Hughes. While the number of deals may not be at record highs, the value of the deals certainly are.

In fact, with the big tie-ups announced on this last day of October, deals have been valued at north of $335 billion for this month, surging past the former record-high of nearly $282 billion from…January 2000 (coincidence or not, when AOL bought Time Warner), according to S&P Global Market Intelligence’s Richard Peterson. Why has Corporate America been in the mood to make such big deals?

There are some reasons why this makes sense. In the wake of continued sluggish economic growth, companies are looking to merge or acquire while interest rates are still relatively low (but on the rise) in order to lock in current borrowing costs while they last. Furthermore, with the impending election, the results could make approving deals tougher, so companies are announcing deals while there is still clarity. Still, it is important to note that just because deals are announced now, they can still face regulatory concerns in the future.

It’s clear that businesses have replied “Deal,” but just how much the corporate landscape changes remains to be seen.


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