Mergers, acquisitions off to hottest start since 2000
Just three weeks into the year, the value of mergers announced totals
"We're in the same Goldilocks environment that contributed to the strong finish to the year for M&A," said
So far, it's been a good year for
Executives and their financial advisers spent much of last year waiting to see how President
"Clarity on tax reform causes companies to be able to make decisions that they perhaps had on hold last year when things were less certain," Scher said.
North American companies, which fell out of favor among acquirers last year, are back on the shopping list in 2018, making up almost 60 percent of all announced transactions so far, the data show.
In the insurance industry,
That transaction showed that CEOs aren't afraid to pay up to get what they want, even with record equity markets pushing valuations higher.
European targets have been less attractive, accounting for
"Large corporates have been active thanks to stronger economic growth, welloriented stock markets and shareholders who are receptive to transformative transactions," said
Private equity firms are also set to ramp up deal making, said
"I would expect to see some very large transactions this year simply because all the stars have aligned," Cohen said. "Private equity firms are flush with new capital commitments, they've seen some very large amounts of funds raised in the past 12 months, and credit markets are as bold and resilient as we've seen in a long time," he said.
The 2018 acquisitions announced so far could easily be eclipsed if one of the most-anticipated tie-ups goes ahead:
Still, CEOs across industries are closely watching the
Macro-economic factors could also slow activity, according to Goldman Sachs' Scher.
"One thing that could cause the music to pause will be a huge correction in the equity markets," she said. "The other thing is if we start to see signs of accelerating inflation and the Fed begins to move quickly to raise rates."
The drug industry is expected to be one of the hottest sectors for dealmaking in 2018. Already, a spate of deals have been announced, including biotech giant
"What we seek to do now is really make external innovation a core part of every step of R&D because we want to work on the most valuable ideas no matter where they come from at all steps," he said.^
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