Merger Mania In The C-Suite: US M&A Hits Record $2 Trillion Annual Run Rate

It’s a deafening drumbeat of mergers and acquisitions, involving enormous amounts of money, dazzling premiums, blinding hype, and some consternation too, as competitors are coagulating into oligopolies.

On Wednesday, property-and-casualty insurance giant ACE, after gobbling up a number of smaller insurers around the world, announced that it would buy its competitor Chubb for $28.3 billion. ACE shares initially jumped over 7% on the announcement, rather than getting hammered for overpaying, though the market later lost some of its early enthusiasm. Chubb initially soared 36% then too gave up some of it. Fun times!

The deal inspired everyone. Drooling investors pumped up the share prices of other insurers: Hartford Financial by 5%; American Financial, Cincinnati Financial, Progressive, and Travelers by over 2%. Party time.

“A deal of this scope tells us that something big has changed, and that is the push for growth,” Citigroup analyst Todd Bault wrote in a note, duly reported as part of the MA hype.

Health insurers too have been at it with a vengeance in a five-way-takeover kerfuffle between mega-insurers Humana, UnitedHealth, Aetna, Anthem, and Cigna. The latter rejected Anthem’s $47 billion offer as “woefully skewed in favor of Anthem shareholders.” So the price isn’t right yet. And just today, Medicaid-focused Centene announced that it would buy Health Net for $6.3 billion.

These deals are making history.

In Q2, US targeted deals reached $635 billion, the highest quarterly total on record, according to Dealogic. MA activity in May, at $243 billion, had blown away the prior records: May 2007 ($226 billion) and January 2000 ($213 billion), each of which was followed by a spectacular stock market crash.

In the first half of 2015, US targeted deals hit $1.03 trillion, an all-time record for a half-year period. It included 21 deals at $10 billion and over, amounting to $572 billion, the highest half-year

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