The New York Times notes a Record $2.5 Trillion in Mergers Were Announced in the First Half of 2018.
History Lesson
Cross Border Deals Total $1 Trillion Despite Tariffs
Economic Hangover
- In 1989, deal-making topped out at $558 billion. By July of 1990, though, a recession had set in.
- Companies announced acquisitions worth a then-record $3.4 trillion in 2000, and within three months the dot-com bubble had burst and the United States economy had fallen into recession.
- Seven years later, merger activity hit another record, topping $4.1 trillion, but the economy had already slipped into recession as the year came to a close.
Will it be different this time?
Mike “Mish” Shedlock
Or at least 3, with Big Brother running one.
A single surviving company is the end result of that game.
Sadly most small startups are groomed to be takeover targets, not stand-alone companies. But no matter, even during the IPO frenzy of the late 1990s most of the companies might as well have been subsidiaries of Kleiner Perkins.
WorldCom/MCI, AOL/Time Warner…which will be the one that tips the boat this time?
No different but might not have peaked yet. One mega mega merger needed to flag the true top.
At this rate, there will only be a few companies. Hence, Capitalism dies a slow death.
The question is how long will the central bank prop up this economy? How much higher can it go before people have to admit it’s artificial?
“Will it be different this time?” You mean like in 2015? Yes, the value of mergers goes up and down, and sometimes that coincides with a recession happening in the next year or two. So weak.