Breach Of Contract

Business mergers hover around $2.5 trillion half way through 2018

Mergers worth a record $2.5 trillion have been brokered so far this year in the United States. At least four of the ten largest deals struck have involved non-tech companies joining forces in hopes of protecting themselves from being overtaken by larger technology firms.

Thompson Reuters data shows that the value of the deals marks a 61 percent increase over the same period last year. The total amount of mergers in 2018 is expected to exceed $5 trillion. If this were to occur, this would mean that 2015 would no longer be the highest valued merger year to date.

Financial analysts had previously predicted that the growing tension among different countries in 2018 would make it less attractive for companies looking to acquire others. It doesn’t seem to be having an adverse impact, though. The number of companies that have acquired another one headquartered in a different country has more than doubled so far this year.

One factor that has motivated companies to acquire others has been an improved economic outlook in many countries. In the United States, for example, corporate tax rates have recently been slashed — leading companies to enjoy higher earnings and interest rates continue to be low. This has motivated many companies like Netflix and Amazon to look to seek to acquire other companies so that they can expand into new industries.

Aside from the technology sector, other big deals have been made among health care companies and media ones. During the first six months this year, there have been at least 36 acquisitions made in these two industries. Each of them has had a value of at least $10 billion each or $950 billion overall. That amount that accounts for at least 38 percent of all transactions.

If there were to be a slowdown in mergers and acquisitions this year, financial analysts note that it would result from interest rates being increased, regulatory uncertainty or trade wars between countries heating up.

When assessing whether a merger will be successful, it’s important for the two companies joining together to look more closely at their corporate cultures to ensure that they’ll mesh successfully. By having a Melbourne business law attorney help you with your merger, you can minimize your risk of having to litigate problems in the future.

Published by
james

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