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?

Mike "Mish" Shedlock

Comments (9)
No. 1-9
shamrock
shamrock

"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.

SweetKenny
SweetKenny

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?

Tony_CA
Tony_CA

At this rate, there will only be a few companies. Hence, Capitalism dies a slow death.

caradoc-again
caradoc-again

No different but might not have peaked yet. One mega mega merger needed to flag the true top.

Bam_Man
Bam_Man

WorldCom/MCI, AOL/Time Warner...which will be the one that tips the boat this time?