A raft of hostile bids made 2006 the biggest year for mergers and acquisitions, with $3,900 billion (€3 trillion) in global deals fuelled by cheap debt, ambitious chief executives and hunger for growth.
The value of deals worldwide was 16 per cent higher than at the height of the dotcom boom in 2000, according to Dealogic, the data provider. And bankers are optimistic the pace of activity will continue next year.
Companies launching hostile bids rose dramatically, with 355 deals so far this year, up from 94 last year and well above the previous record of 272 in 1999. These included Eon's $66.1 billion acquisition of Endesa and Mittal Steel's $39.5 billion takeover of Arcelor.
"Hostile activity will remain high," said Gavin MacDonald, head of European M&A at Morgan Stanley. "Corporates want to make strategic moves and will not be deterred by reluctant targets."
The surge of deals was bolstered by a tide of private equity cash looking for investments. Buy-outs reached a record $709.8 billion, more than double the 2005 level. They accounted for 18 per cent of M&A activity compared with 12 per cent last year.
Europe-targeted M&A reached $1,530 billion, while US deals totalled $1,440 billion. In Asia-Pacific, excluding Japan, deals reached $381.5 billion.
Investment banks sucked up fees of $18.8 billion from the boom, from $17.2 billion last year, triggering million-dollar bonuses for M&A bankers. Some heads of European M&A will take home $10 million.
Goldman Sachs led the global, US and Asia-Pacific (ex-Japan) rankings for M&A advisers and surpassed $1,000 billion in global volume for the first time since 1999.
