Daimler-Chrysler, AOL-Time Warner, and other ill-fated mega-mergers were made during the last stock market boom. Like me, many people consider merger frenzies a sure sign of an impending market top. In any event, 2007 is so far turning out to be a banner year for merger activity. Whether you too see the end of yet another speculative episode to be close at hand or not, the Financial Times has an article on explosive M&A growth this year:
Stockbrokers and other securities companies were fully in the throes of merger mania in the first half of this year, with deal volume globally up by 77 per cent, according to a study by Freeman & Co, the US-based investment bank.The overall deal value increased to $86.6bn in the first half, compared with $50.4bn in all of 2006. The data excluded the proposed $97bn acquisition of ABN Amro by Barclays.In the first half of this year there were 139 deals, while annualised 2006 figures showed there were only 79 deals in the first half of 2006.The first half saw 36 deals among investment banks – companies with stockbroking and corporate finance businesses – while there were 34 transactions for the full year in 2006.Deals in research, sales and trading also increased sharply, with 29 deals completed in the first half of 2007, up from 15 in all of the previous year. Asia proved to be a hot spot for deals in this sector, with China, India, Indonesia and Hong Kong particularly active.Electronic trading and exchanges, already the most active sector, also saw a surge, with 44 deals in the first half, up from 55 in the whole of last year.Only deals among online brokers look set to level off or decline, with five deals in the first half, versus nine in the full year 2006.