US mergers and acquisitions activity broke an all-time monthly record in May, according to Dealogic data in the Financial Times. The overall value of deals in US-bound M&A activity was $253 billion in May of 2015. This compares to $226 billion during May 2007 and $213 billion in January of 2000, which were previously the busiest and second-busiest in US history.
The Times notes that many bankers and lawyers are expecting 2015 to be a record year, with chief executives under pressure to expand their businesses and deals often being the fastest and easiest way to do so. They also expect that M&A activity will continue to be strong in the near term, given pent-up demand for fixed-income investments.
Much of the acquisition spree has been spurred on by a borrowing boom among US companies, benefitting from advantageous credit terms before an expected tightening of monetary policy in September. Average company bond yields have halved since 2007 to about 3 per cent in the US, and there has been more than $100 billion of corporate bond issuance every month for the past four months-the longest ever streak of issuance above that mark.
In Canada, according to Lexpert's DealsWire, May of this year saw $8.1 billion of M&A transactions worth over $50 million. This contrasts with $8.2 billion worth of transactions in 2014.
The author would like to thank Joe Bricker, summer student, for his assistance in preparing this legal update.
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