Worldwide M&A activity tops $1 trillion so far this year

LONDON Fri Apr 25, 2014 12:13pm EDT

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LONDON (Reuters) - The value of worldwide mergers and acquisitions announced so far this year has topped $1 trillion, passing that level for only the third time this early in the year since records began in 1980, weekly Thomson Reuters data showed on Friday.

Deal volumes started to recover earlier this year after falling back in 2013 due to a mix of economic uncertainty, regulatory interventions and shareholder activism that made executives cautious about pursuing deals.

By the end of the first quarter of this year, deal activity had risen 54 percent on the same period last year, with deals worth a total of $710 billion announced.

Bankers said confidence appeared to be returning, with some companies are becoming bolder and more aggressive.

"M&A seems to be back," one banker told Reuters.

This week's data shows year-to-date volumes of $1.1 trillion, helped by a flurry of deals in the healthcare and pharmaceuticals sectors.

Earlier this week Zimmer Holdings (ZMH.N) said it would buy rival orthopedic products maker Biomet LVBHAB.UL for $13.35 billion - the largest deal in the healthcare equipment sector since Johnson & Johnson (JNJ.N) acquired Synthes in 2011.

The deal came one day after Canada's Valeant Pharmaceuticals International (VRX.TO) together with activist investor Bill Ackman made an unsolicited $47 billion bid to buy Botox-maker Allergan (AGN.N).

European dealmakers were also busy, as Swiss drugmaker Novartis (NOVN.VX) and GlaxoSmithKline (GSK.L) announced an agreement to trade more than $20 billion worth of assets.

Investors reacted positively to the asset exchange, and industry sources believe the transaction could become a template for future M&A deals in the pharma sector and beyond, especially between large corporates.

"It just makes sense for companies to get stronger in fewer businesses," said one sector banker.

U.S. investment bank Goldman Sachs (GS.N), an adviser to Biomet and Novartis, climbed to the top of the M&A league table after working on deals worth $72 billion this week. Morgan Stanley (MS.N) took second place, while Bank of America Merrill Lynch BAC.M lay in third.

Dealmakers are expected to remain busy in the coming weeks, with several potential tie-ups in the pipeline.

Media reports earlier this week said Pfizer (PFE.N) has approached British rival AstraZeneca (AZN.L) to propose a $101 billion takeover.

Sources told Reuters on Friday that U.S. conglomerate General Electric (GE.N) was in talks with France's Alstom (ALSO.PA) to take over its global power turbines division.

(For more detail on the week's investment banking data please click: here)

(Editing by Erica Billingham and Keiron Henderson)

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