2015 was a record setting year for mergers and acquisitions. Globally, the mergers and acquisitions activity will likely reach over $4 trillion, beating the previous record of $3.66 trillion set in 2007 according to the research firm Mergermarket. By the end of October this year, 48 mega deals worth $1.35 trillion had been triggered, topping the previous record of 40 deals (worth $1.17 trillion) back in 1999.
In October alone this year, there were two blockbuster deals that took the world by storm. Dell Inc., one of the world’s largest technology corporations, announced its landmark $67 billion acquisition of another technology giant, EMC Corporation. Within a week, alcohol conglomerate Anheuser Busch made headlines through its purchasing agreement with SABMiller, which merged the top two brewers (measured by revenues) in the world. Most recently, chemical industry giants Dow Chemical and DuPont announced a $130 billion merger deal.
The trend of these mega-deals has changed the landscape of American industry from a combination of unrelated sectors toward focusing on larger expansion in core businesses, where the top companies already enjoy a dominant position. The concentration on greater dominance has brought forth the legendary mergers and acquisition deals such as the ones we’ve seen this year.
More so, these merger and acquisition deals have been largely geared towards the surging high technology sector, reflective of the technology-driven world we live in today. Economically, these deals seem to be justified by the hope that this will spur innovations. As we are in the midst of the Digital Revolution, these deals may just be the tip of the iceberg as human advancements in technology has been growing at an exponential rate; remember that it took less than 70 years from the first human flight to land on the moon.