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Rediff.com  » Business » Global M&A volume reaches $3-trillion mark

Global M&A volume reaches $3-trillion mark

October 21, 2008 15:33 IST

Global merger and acquisition volume has reached the $3 trillion mark so far this year, driven by slew of M&A activity pursuant to the financial turmoil across the world, a latest report says.

Though the global M&A volume has reached a whopping $3 trillion mark, it represents a decline of 22 per cent from its year ago period, as all regions except Latin America reported decreasing M&A volume, according to data compiled by deal tracking firm Dealogic.

"Global M&A has reached $3 trillion with the help of recently announced banking sector targeted deals led by the $44.4 billion acquisition of Merrill Lynch by Bank of America," Dealogic said.

The $29.3-billion acquisition of HBOS by Lloyds TSB Group and the $15.1-billion acquisition of Wachovia by Wells Fargo, in addition to billions invested by European and United States were the other significant deals so far this year.

Though finance is the most targetted industry, the finance M&A volume declined to $538.3 billion till October 20, from $582.2 billion in the period under review last year.

According to experts, the crisis in financial markets is acting as a dampener for M&A deals. Although, valuations of companies have gone down, the banks are cutting down their exposure to funding the deals.

"However, $538.3 billion is still the second largest year-to-date volume on record and finance is the most targeted industry so far this year," Dealogic added.

Felipe Pizarro, an analyst at Dealogic said, "United States targeted deals account for the highest withdrawn volume in 2008 YTD with $173.1 billion, followed by Spain with $66.2 billion.

"While Australia was the third most targeted deals with $ 49.2 billion."

North Asia, Latin America and Africa are the only three regions that have seen an increase in completed M&A volume. North Asia has seen the two largest completed deals in 2008 YTD close in the last three weeks, bringing its total to $179.6 billion, an increase of 4 percentage points from $172.0 billion in the period under review last year.

Some of the top global finance M&A deals so far this year were Bank of America's acquisition of Merrill Lynch for $44.4 billion, followed by Lloyds TSB Group's takeover of HBOS for $29.3 billion and State of Netherlands' acquisition of Fortis Bank Nederland for $18.7 billion.

Other most significant finance deals include Westpac Banking's $18.5 billion acquisition of St George Bank and Wells Fargo's $15.1 billion acquisition of Wachovia.

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