Merger Madness Hits Wall Street
Two massive mergers worth more than $100B were made yesterday in the latest evidence that the economy's major players are hungry for risk in the post-downturn landscape. Actavis' $66B purchase of Allergan—the pharma company responsible for Botox—and Halliburton's $34.6B acquisition of oilfield services company Baker Hughes set the year on track for $1.5T in American mergers and acquisitions, the most since 2000. Cheap debt, a buoyant stock market and assuaged fears of a double dip recession have all contributed to the merger mania, the New York Times reports. Globally, the total value of M&A has already surged past $3T, or 50% above last year's comparable pace.
Commercial real estate has seen its own share of takeovers. Earlier this month, TPG Capital closed on its $1.1B acquisition of DTZ, which anticipated closing on its Cassidy Turley buy by year's end. While mergers signal renewed optimism, market watchers are split on whether they aid or harm the economy. And the Times points out that the last two M&A booms were followed by the dot-com collapse and 2008 financial crisis.