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Mergers and acquisitions break world record

M&A transactions around the world totaled $ 4.3 trillion during the first nine months of 2021, the highest amount ever recorded for that period, according to Refinitiv data.

The transaction value of $ 1.52 trillion recorded in the third quarter of 2021 was the highest for a quarter.

So executives are aggressively expanding their businesses in today’s climate.

In the opinion of First Trust Portfolios, an investment management company, one of the best barometers to judge the overall business climate is M&A activity.

Refinitiv Global Markets operates as an investment advisory firm and offers portfolio monitoring, risk management, accounting and tax planning services.

The environment has been conducive to the M&A boom, according to Marc Cooper, CEO of Solomon Partners, a boutique investment bank. Speaking to Fortune, Cooper points to stifled demand in the M&A space arising from the pandemic, low interest rates and an “aggressive” growing economy that is boosting business performance.

Mergers and acquisitions and context

The International Monetary Fund (IMF) reported in its latest statement that global Gross Domestic Product (GDP) growth is expected to be 5.9% in 2021 and 4.9% in 2022, compared to -3.1% in 2020.

In particular, the IMF forecasts that the US economy will grow 6.0% in 2021 and 5.2% in 2022, from -3.4% in 2020.

For all advanced economies, the IMF projects GDP growth of 5.2% in 2021 and 4.5% in 2022, compared to -4.5% in 2020.

Finally, the IMF projects that emerging market and developing economies will grow at a rate of 6.4% in 2021 and 5.1% in 2022, compared to -2.1% in 2020.

Looking ahead to 2022, growth prospects are encouraging, but slightly lower than the strong pandemic-induced recovery in 2021.

The IMF is concerned that inflationary pressures from global supply chain bottlenecks could push prices up if problems persist.

That scenario could, in turn, cause central banks to raise rates quickly to try to prevent inflation from overheating.

 

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