Tech titans rule 2016 with $268bn of M&A activity
Technology is leading the global mergers and acquisitions sector this year with $267.6bn worth of deals announced so far, according to new research by financial markets platform Dealogic.
This is only the second time on record that technology deals accounted for the maximum number of M&A deals made in a year. The year 2000 saw the highest number of deals in the technology sector with M&A activity worth over $289bn taking place.
Over 4,100 deals have been announced this year so far, up seven per cent on 2015 when 4,496 deals worth $250.6bn were revealed.
The US is leading global technology M&A in 2016 with deals worth $125.8bn unveiled, its second highest record behind 2000 ($198.7bn). Its share of global volume stands at 47 per cent while deals announced by Chinese acquirers account for 32 per cent ($85.5bn). Dealogic said the US has overtaken China as the top acquiring nation globally.
On Monday, Microsoft announced it’s acquiring professional social network LinkedIn in a $26.2bn deal. The deal is the largest ever acquisition by the software company and the fourth largest M&A deal announced this year. It is also one of only 10 M&A deals announced in the technology sector valued at $20bn or more. Prior to the Microsoft-LinkedIn deal, volume in the M&A sector was down four per cent year-on-year.
Read more: Eight $1bn plus Microsoft megadeals, and where the companies are now
In a memo to staff, Microsoft boss Satya Nadella said: “This deal brings together the world’s leading professional cloud with the world’s leading professional network. I have been learning about LinkedIn for some time while also reflecting on how networks can truly differentiate cloud services. It’s clear to me that the LinkedIn team has grown a fantastic business and an impressive network of more than 433m professionals.”
The acquisition sent shares in Twitter soaring five per cent amid speculation that it could be heading towards a takeover.
Read more: The Microsoft LinkedIn deal is the wind beneath Twitter's wings today
Yesterday, Twitter’s newly returned CEO Jack Dorsey revealed that the tech giant took a $70m stake in music streaming service SoundCloud earlier this year.
Speaking to tech website Recode, Dorsey said: “They’ve [SoundCloud] been great partners of ours over the years and their community-supported approach mirrors ours in many ways.”
The embattled social network, which saw its shares drop to an all-time low of $13.90 in March, is yet to make a profit.