Companies are on a buying spree this year, driving the M&A sector towards record highs in 2015.
According to Dealogic, deal volume has reached $4.304 trillion so far this year, excluding spin-offs, pushing past the previous record of $4.296 from 2007.
While companies are striking deals across all sectors, it’s the healthcare and technology industries that are leading the way. With just a few weeks to go before the start of 2016, healthcare has accounted for 15.38% of the total volume of M&A deals, while technology is not far behind, accounting for 13.5% of the market share.
Companies are searching for growth via acquisition given a tepid global growth picture, notes Yahoo Finance market reporter Nicole Sinclair in the above video. “Also low interest rates and healthy cash balance sheets are driving demand.”
The largest health-care acquisition of the year is Pfizer’s roughly $160 billion merger with Allergan, while Dell’s $66 billion deal for EMC Corp. led the way for technology. But desire for growth is not just coming from those two sectors. Anheuser-Busch’s $117 billion acquisition of SABMiller is the largest beverage deal in history.
“For companies in a weak economic environment, both domestically and globally, we really have to expand our market share. Not organically, but do so by acquiring other well-positioned companies,” said Sam Stovall, S&P Capitol U.S. Equity Strategist.