Is It Too Soon To Call 2014 A Year Of Mergers And Acquisitions?
Two months in and 2014 is already racking up some serious mergers and acquisitions. Is there more to this trend?
Last month we wrote an article about Davos, speculating that companies who missed the event may have been lost a big opportunity to network in what is shaping up to be a big year for mergers and acquisitions.
Corporations sat on record amounts of cash at the end of 2013. Record stock-market gains and an improving economy meant that companies had huge reserves, and it was only a matter of time before they started to deploy all that dry powder. Lots of analysts were predicting that 2014 would be a year for M&A.
Two months in and there's already enough evidence to suggest that the analysts were right. Signet (SIG) bought Zale Corp. (ZLC), Joseph A. Banks (JASB) is buying Eddie Bauer — and the last two weeks have seen two of the largest health-care mergers of all time.
Financial journalists are having a hard time keeping up with all the activity. There are so many mergers and acquisitions going on that a billion dollar deal was announced in between starting and finishing this article.
2014 stands to set some pretty important legal precedents as well. Comcast (CMCSA) and Time Warner (TWC) are bracing for what will almost certainly be a legal battle to approve their merger, which would effectively put 19 of the 20 largest metropolitan areas on the same cable plan.
Speculation about who will make the next deal is fueling a lot of movement in the market. Tesla (TSLA) posted a new record high after rumors swirled that it was a potential acquisition target for the techology giant Apple (AAPL). It's certainly not the craziest thing in the world to expect Apple would be attracted to a charismatic CEO like Elon Musk — even if some analysts are skeptical.
We built a list of some of this week's largest mergers. Many of the stocks on it are up as much as 40% for the morning.