By Jijo Jacob
August 20, 2010 8:53 AM EDT
While July witnessed the highest volume of global M&A deals so far this year, August is gingerly catching up.
According to global M&A tracker Dealogic, July saw the highest M&A deal volume so far this year, with deals announced totaling $240.8 billion.
Global M&A volume in the first seven months of the year has already surpassed the total volume of deals in 2009. The volume of deals stood at $1.49 trillion as of end-July, up 14 percent over $1.3 trillion during the same period last year.
Topping this, Intel on Thursday announced the acquisition of security-software maker McAfee Inc. for $7.68 billion. In its biggest purchase so far, Intel has offered to pay in cash.
Bloomberg predicted on Friday that the size of global M&A deals in August could grow to $285 billion, making the month global M&A topper so far this year.
Global companies are sitting on top of piles of cash and that they are in the market for acquisitions. Companies are increasingly showing optimism since global slowdown hit M&A activity in 2008.
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According to Dealogic data, global M&A activity reached zenith in 2007 when the total size boomed past the three trillion mark to touch $3.16 trillion. In 2008 this dwindled to $2.14 trillion and the global M&A tally nosedived to a paltry $1.3 trillion in 2009.
Powered by big ticket takeovers this year, global M&A deals are on track to regain 2008 levels. Global M&A deal volume in January was 197.4 billion, thanks to mammoth deals by Novartis and America Mobil SAB de CV. Novartis shelled out $28 billion to buy 52 percent stake in Switzerland's Alcon Inc., while Latin American wireless communications provider America Mobil SAB de CV acquired Mexico's Carso Global Telecom SA de for $24.3 billion.
M&A deals in February stood at $197.5 billion, with Coca-Cola and Schlumberger making big ticket acquisitions valued at $13.6 billion and $12.25 billion respectively.
In March, global M&A size sprinted to $236.5 billion, powered by MetLife Inc.'s purchase of American Life Insurance for $15.5 billion. In April, the volume was down to $183.3 billion, and then nudged up to 222.9 billion in May.
Deal volume in June was 210.8 billion, the biggest deal of the month being News Corp's purchase of British Sky Broadcasting Group for $13.5 billion.
According to Dealogic data, July saw global M&A deals worth $240.8 billion, as there was a flurry of deals across the globe. The biggest were Hong Kong's Cheung Kong Infrastructure's $9 billion purchase of UK's EDF Energy and Caja Madrid's $8/6 billion purchase of Bancaja.
It seems, apart from growing optimism over the economy's performance, the acquisition drive is also powered by an abundance of cash reserves. U.S. public companies carried $2.03 trillion in cash and short-term investments at the end of the first quarter, WSJ has said in a report, quoting data from FactSet Research.
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