Investor support for large acquisitions and a desire to trump rivals in consolidating markets have led chief executives to strike big transactions so far in 2014, raising year-to-date global deal volumes to their highest level in seven years.
Corporate buyers did not shy away from going hostile if their targets proved unwilling to sell, while more U.S. companies rushed to buy overseas peers to lower tax rates and access cash held offshore in a practice known as inversion.
The dealmaking frenzy could last for several months absent geopolitical or economic shocks, with buyers keen to take advantage of their strong stock prices, ample cash reserves and cheap available financing.
“Companies have strategic imperatives to do deals, they have the cash to do deals, and they can borrow additional cash at record-low rates,” said Frank Aquila, a mergers and acquisitions lawyer at Sullivan & Cromwell LLP. “It really is a bit of a perfect storm when it comes to dealmaking.”
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