LONDON (AP) — More “headline-grabbing” acquisitions are likely over the coming year as businesses take
advantage of a period of improving economic growth and cheap financing.
That’s the conclusion of a survey by business consulting firm EY, which says the value of takeover deals
announced in the first half of 2014 struck its highest level since the end of the boom years in 2007.

In its half-yearly update of corporate activity, EY said Thursday that the value of deals rose by 50
percent from the same period the year before to $1.7 trillion. Not since the global financial crisis
first erupted, prompting companies to batten down the hatches, has the value of deals been that high.

For years, big mergers and acquisitions have been notable for their absence as companies stocked up on
cash reserves to weather the global economic storms. Pursuing M&A was very much a secondary
consideration for boards round the world.
The latest EY figures confirm change is afoot. From the planned $67 billion tie-up between Comcast and
Time Warner, and AT&T’s $67 billion deal with DirecTV to Valeant Pharmaceuticals’ $55 billion
hostile approach for botox maker Allergan, the last few months have seen a flurry of high-value
corporate activity. Facebook even announced its biggest ever acquisition with a proposed $19 billion
takeover of WhatsApp.
EY, which sourced data from Dealogic, said the next 6 to 12 months should continue to provide the “ideal
window of opportunity” for businesses to pursue more deals. It said high equity valuations, low interest
rates and cheap debt, as well as high cash levels built up during the years of retrenchment, have
provided a favorable environment for deal-making.
Those favorable conditions may fade as major central banks start raising interest rates as the global
recovery gathers pace. In the U.S., expectations are for rates to start rising in 2015, potentially
increasing the cost of financing deals.
“Leading companies will look to do smart and strategic M&A before the current deal climate
changes, so we can expect more large, headline-grabbing acquisitions to come,” said Pip McCrostie, EY’s
global head of M&A.
Though high in value, EY said the number of mergers and acquisitions remains low, with businesses
seemingly looking for big, transformative deals.
Most of the M&A deal-making is happening in developed economies, such as the U.S., Britain and
France, as executives think they are less risky options now that their economies are growing again.
Though U.S. economic growth suffered a big setback in the first quarter due to bad weather, it’s poised
to grow relatively strongly over the rest of the year. And the 18-country eurozone is growing
consistently, albeit at a modest pace.
“Emerging high-growth and frontier markets will always be attractive in terms of investment, but safe and
secure modest growth is attracting the most investment as the global economy moves into a new phase,”
said McCrostie.