Record Mergers In 2018: History Has Ominous Suggestion
2018 is on pace for a record number of mergers. A look at prior merger peaks suggests this is not a good thing.
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?
Disclosure: None.
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I liked your "Everything Bubble" label for the period we're currently experiencing. Do you see signs that this is really a bubble, in a comparable sense to what happened in 2008? I've been looking for signs, but I haven't seen anything, beyond the constant positivity in markets over the last 9 years. Valuations are definitely high, but not exorbitantly so. I also feel this may be a bubble, but I don't have clear evidence to support this sense. Any thoughts?