Approximately $2.35 trillion of mergers and acquisitions deals have been announced globally so far in 2018, up 57 percent from the same period in 2017. If the trend continues, the global M&A market may reach $4.8 trillion for the full year, outpacing the prior record of $4.3 trillion in 2007, according to a report by Dealogic cited by The Wall Street Journal.
Here are four things to know:
1. Thus far in 2018, Dealogic determined there have been 25 mergers valued at a total of $10 billion or more. The figure breaks the previous record set in 2007, when there were 20 deals within the first six months of the year, the report states.
2. Analysts speculate the burst in deal-making stems from an increasingly robust economy, which has emboldened CEOs to engage in M&A and has kept interest rates low and stock prices at nearly record-breaking highs.
3. The rising threat of large conglomerate corporations across various industries has also encouraged smaller companies to consolidate. For example, Amazon's foray into healthcare has sent other industry-leading corporations to consider consolidation. Cigna agreed to purchase Express Scripts Holding for $54 million in March, while CVS Health is seeking to buy insurer Aetna.
"There are a lot of rapidly evolving industries that are being transformed by technology, and that is forcing these companies to look to M&A to improve their competitive and strategic positions," Kurt Simon, the global chairman of M&A at JPMorgan Chase, told The Wall Street Journal.
4. However, experts acknowledge the M&A market is notoriously unpredictable, with any number of factors affecting deal-making. While elevated stock prices may encourage CEOs to engage in M&A, they also make such transactions more expensive and may potentially stifle activity, the report states.
To access the full report, click here.
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