Merger Deal

U.S. Companies Merging and Acquiring at Record Pace

Merger DealThe U.S. has always had a powerful economy. Companies merge all the time, and larger companies acquire smaller ones by cutting deals that would benefit both of them. Last October 2016, high-profile mergers and acquisitions were valued at more than $251 billion, breaking records across the charts.

Companies in Denver and other cities hire business attorneys to help them merge successfully. The country’s sudden “merger mania” seemed to peak in the third week of October, where companies racked up to $177 billion in mergers and acquisitions for that week alone.

High-profile Tech Giants

Technology is one of the busiest sectors — they currently make up more than a quarter of all U.S. targeted deals, with a 19 percent deal value, with the health care sector close behind. Deal value determines how profitable the deal would be for either party.

Some of the biggest deals so far include the acquisition of the Time Warner Inc., a media and entertainment company, by AT&T Inc., one of the countries top telecommunications companies. The deal cost $85 billion.

Another tech acquisition was Qualcomm Inc.’s purchase of NXP Semiconductors NV. Qualcomm bought the company for a cool $39 billion.

Quick Growth

Though it is currently unclear why October was such a hot month for company acquisitions and mergers, many companies understand that this is one of the fastest ways to bolster their growth. Mergers allow struggling companies to boost sales, grow profit quickly, and mitigate their losses.

For the larger companies, this means getting quality staff and additional skills to help bolster their presence in their respective industries. Mergers allow companies to innovate further and increase their market shares.

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Unfortunately, deals do not always fall through. Write-downs can be especially damaging to certain companies. For example, in 2007, write-downs of goodwill caused a major reduction of earnings.

Though October was a great month for mergers and acquisitions, the impact still remains to be seen.