Us dealmaking kicks off 2017 with biggest start in 7 years

Us dealmaking kicks off 2017 with biggest start in 7 years


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Richard Seagraves | Getty Images Nine days into the new year, and U.S. corporate deal announcements are off to their quickest pace by value since 2010, according to S&P Global Market


Intelligence. More than $18 billion in U.S. mergers and acquisitions were announced Monday, bringing the year-to-date value of deals to $35.7 billion, said Richard Peterson, senior director


at S&P. That's more than twice the $16.1 billion in U.S. deals in the same period last year. "It's probably a continuation of the broader trend that's been going on,


not only for last year but for the last couple years — four consecutive years of more than $1 trillion in M&A," Peterson said, noting corporate deals in health care should continue.


Monday's deal news was all in the health-care industry. Mars Petcare announced it would acquire pet hospital operator VCA for $9.1 billion, Japan's Takeda said it would buy


Massachusetts-based Ariad Pharmaceuticals for $5.2 billion and UnitedHealth's Optum unit announced it would purchase Surgical Care Affiliates for $3.97 billion, according to S&P.


"We're off to a good start, better than we were last year. ... Investors should have some confidence in the flow of deal activity," Peterson said. Increased corporate deal


activity is generally seen as a positive sign for market health. The strong start to corporate deal announcements in 2017 coincides with a 1.34 percent gain for the S&P 500 so far this


year. In 2016, the S&P had its worst five-day start to a year in history, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Stocks and dealmaking


activity had recovered significantly by the end of 2016. The S&P 500 gained 9.5 percent. Last year also saw $1.7 trillion in announced U.S. corporate deals, the third biggest year ever


by value, according to S&P. October 2016 marked a record month for such mergers and acquisitions, including an $85 billion-plus agreement between AT&T and Time Warner. Analysts then


generally attributed the surge in corporate deals to the rise in interest rates, as companies tried to lock in lower financing costs ahead of further increases in borrowing costs.