SPLASHING THE CASH

Charted: Companies spent over $5 trillion buying each other last year

Last year, companies spent just over $5 trillion buying or merging with other enterprises. That’s up by over a third from 2014, and is almost half a trillion dollars more than the previous record set in 2007, according to Dealogic (pdf).

While growth economies in Asia reached record levels of investment, it was the US that proved the world’s largest magnet for takeover cash; it attracted 49% of all M&A spending last year, up from a little over 40% in 2014.

Here, we can see the total value of all mergers and acquisitions, globally, in recent years:

And broken down by the top 10 target countries, the popularity of US-based companies among buyers is immediately clear:

Purchases of Asia-Pacific-based companies reached almost $1.3 trillion in 2015, surpassing the $1 trillion mark for the first time. That means that around a quarter of all M&A funds were spent in the region last year:

Partly, the reason for the massive increase in M&A spending globally has been the rising popularity of the “mega-merger.” The number of deals topping $10 billion hit a record 69 in 2015, while there were 10 deals surpassing $50 billion in value—also a record.

Technology and healthcare topped the list of industries for deal making last year:

Among the biggest deals of the year was AB InBev’s $117.4 billion purchase of fellow brewer SABMiller (this deal was agreed and publicized, yet is still subject to regulatory approval), Dell’s $66 billion buyout of EMC, and Pfizer’s $160 billion purchase of Allergan—also the second largest acquisition ever recorded.

The high number of mega-mergers among all this deal making may or may not be a good thing, and there is plenty to suggest that such deals don’t tend to work out particularly well.

But whether they succeed or not, the finance industry likely did well from all the tie-ups. Here, we can see which banks oversaw the largest amount of M&A cash:

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