US corporate takeovers are back on trend in October, with deals totaling $139 billion so far. That’s almost triple the same period last year and the largest volume for a single month since June 2019, according to Bloomberg.
Notably, one of the biggest deals of the year finally closed: Microsoft $MSFT Corp.’s near–$69 billion purchase of video game giant Activision $ATVI Blizzard, which wrapped up on Oct. 13 after being in regulatory chokehold for 22 months.
But it’s the oil and gas sector that’s really warming up deal activity with a flurry of consolidating moves, as companies try to cut costs and boost production.
Chevron $CVX Corp. announced today (Oct. 23) that it’s purchasing fellow oil producer Hess Corp. in an all-stock takeover worth $53 billion. Nearly two weeks ago, ExxonMobil $XOM Corp. bought Pioneer Natural Resources $PXD for close to $60 billion—and told the world that the deal is good for the environment.
Independent oil and gas player Civitas Resources moved farther into West Texas with its $2.1 billion offer for Vencer Energy from owner Vitol, a European energy and commodity trading company.
Devon Energy $DVN is reportedly looking at targets including rivals Marathon $MPC Oil, currently valued at $17.5 billion, and CrownRock, whose valuation is $10 billion, according to Bloomberg.
Bloomberg also reported a major potential merger in the natural gas sector: Chesapeake Energy, valued at $12 billion, is considering buying Southwestern Energy, valued at $8.1 billion.
Other deals announced in October include drugmaker Bristol Myers Squibb $BMY’s agreement to buy biotech firm Mirati Therapeutics for $5.8 billion, and Prosperity Life affiliate USA Life Insurance’s purchase of National Western Life for $1.9 billion.
Investors bet on an M&A explosion in 2024
Not only did October surprise with the surge in deals, but investors are betting on another burst of activity in 2024. Executives at the AlphaMarket Growth Summit noted that about 1,200 private US companies will run out of money by the end of next year. Those businesses could seek to raise capital, either by going public or making acquisitions, Fortune reported.
Meanwhile, perhaps too optimistically, investors are banking on the US Federal Reserve to start lowering interest rates in 2024.