M&A Activity: Where are We in the Cycle?

Abstract

A number of studies have shown that M&A activity is cyclical by nature. Drivers such as economic expansion, regulatory changes or the emergence of new technologies have meant that M&A transaction volumes in the US have followed a succession of high and low points for over a century now.

After several lean years following the 2008 financial crisis, M&A activity on capital markets is enjoying a marked resurgence. This is illustrated by the return of mega deals in both the US and Europe and the resumption of bidding wars. A number of questions spring to mind in this newly buoyant context: is it the beginning of another cycle? If so, where are we in this cycle? How long will it last? What are the drivers?

Keywords: M&A, merger and acquisition, risk arbitrage, merger arbitrage, cycle

JEL Classification: G34