What is the state of merger-acquisition activity in the United States and internationally?
Just take a look at this number, say researchers at the Harvard Business Review: For the third consecutive year, more than 50,000 M&A transactions have been concluded across the globe. That surge of combination-linked commercial activity has likely never before occurred.
That poses a direct and obvious question: What’s fueling the upward spike?
The Harvard article points to “deep changes in technology and globalization” as prime catalysts driving change.
There’s no question that the American business universe is dissimilar in fundamental ways from what it looked like even a few short years ago. Seemingly, new linkages between companies are announced every day. Readers of our commercial law blog readily see the high level of M&A activity that is occurring in the Los Angeles metro area and all across Southern California.
Harvard researchers point to a new phenomenon in the process, namely, an interesting “massive remix of assets” that is taking place. That means that corporate monies are being applied via M&A deals in ways that are changing the ways in which companies operate and consumers interact with businesses.
For example, companies are progressively linking up these days in ways that differ from traditional “horizontal” mergers (e.g., one fast-food chain buying out another). Health insurer Aetna recently merged with pharmacy company CVS, for example, creating an entirely new kind of company. Similar transactions are unfolding in other industries.
The bottom-line reality for enterprises of all stripes in California and elsewhere is that the business landscape is fluid and ever-changing, with new challenges and opportunities constantly arising.