NEW YORK: Mega-merger fever is back on Wall Street, six years after the financial crisis, and 2014 is shaping up as a record year for takeovers in a sign of US corporate optimism.
In rapid succession on Monday, pharmaceutical giant Actavis said it would pay $66 billion for Allergan, which makes the wrinkle-eraser Botox, and oilfield services company Halliburton said it would take over rival Baker Hughes for $34.6 billion.
Times have never been riper for big deals, mergers-and-acquisitions bankers told AFP.
"A number of factors are driving M&A activity, including low-cost financing, strong equity markets, more confidence in corporate boardrooms, and an increasingly competitive deal landscape, where many organizations do not want to be left behind," said Mark Shafir, co-head of Global M&A at Citigroup.
Jack MacDonald, co-head of Americas M&A at Bank of America Merrill Lynch, explained that companies are making strategic acquisitions outside their core businesses in order to accelerate growth.
"Clearly a strong correlation exists between growth and valuation multiples," he said.
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