Innovation, Competition Spur Near-Record M&A in Tech Segment (MSFT) (VZ)
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Those that think the M&A market isn't hot right now need to take a cold shower and snap back into it.
In the last week, with Microsoft (Nasdaq: MSFT) buying assets from Nokia (NYSE: NOK) and Verizon (NYSE: VZ) acquiring full control of Verizon Wireless from Vodafone (Nasdaq: VOD), the third-quarter has seen about $240 billion in tech and telecom deals. Its poised to be the hottest quarter since 2000, when AOL, Inc. (NYSE: AOL) and Time Warner (NYSE: TWX) announced a merger valued at $186 billion.
With the tech and telecom market alive and well, total M&A volume for the quarter is at $520 billion, according to Bloomberg-compiled data.
JPMorgan's Jennifer Nason, who worked on the Verizon and Nokia deals, commented today,
Another aspect is the borrowing environment. Expectations for higher rates in the coming months have put some companies plans into process to avoid paying out a higher amount of money over the long run for the same deal.
One such deal might surround Vodafone. While the company recently acquired Kabel Deutschland to gain broader market share in Germany, it just had a cash inflow from its Verizon deal so it could make another strategic purchase. Last week, it was also speculated that AT&T (NYSE: T) might move on Vodafone following close of the Verizon deal.
U.S. markets are up on today's session.
In the last week, with Microsoft (Nasdaq: MSFT) buying assets from Nokia (NYSE: NOK) and Verizon (NYSE: VZ) acquiring full control of Verizon Wireless from Vodafone (Nasdaq: VOD), the third-quarter has seen about $240 billion in tech and telecom deals. Its poised to be the hottest quarter since 2000, when AOL, Inc. (NYSE: AOL) and Time Warner (NYSE: TWX) announced a merger valued at $186 billion.
With the tech and telecom market alive and well, total M&A volume for the quarter is at $520 billion, according to Bloomberg-compiled data.
JPMorgan's Jennifer Nason, who worked on the Verizon and Nokia deals, commented today,
The fast pace of innovation, increasing competitive dynamics and the potential for increasing capital costs have created the perfect storm for strategic moves which had been contemplated for a while.Nason expects more deals to happen soon.
Another aspect is the borrowing environment. Expectations for higher rates in the coming months have put some companies plans into process to avoid paying out a higher amount of money over the long run for the same deal.
One such deal might surround Vodafone. While the company recently acquired Kabel Deutschland to gain broader market share in Germany, it just had a cash inflow from its Verizon deal so it could make another strategic purchase. Last week, it was also speculated that AT&T (NYSE: T) might move on Vodafone following close of the Verizon deal.
U.S. markets are up on today's session.
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