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Businesses Spend $1.74T On M&A In First Half Of ’21, Break 40 Year Record

Businesses were hungry for mergers and acquisitions involving U.S. companies for the first six months of 2021 — the numbers for that sat at $1.74 trillion, the Wall Street Journal (WSJ) reports.

That amounted to the highest total in almost 40 years.

The amount of those kinds of transactions was massively up from a year ago, when they were sitting at $511.79 billion, and at $1.28 trillion for the first several months of 2019, WSJ writes.

In addition, WSJ writes that the number of U.S.-involved deals was sitting at 9,275 — a number higher than periods in either 2020 or 2019, according to Refinitiv reports.

Many companies have begun looking into quicker routes to grow their businesses because of pressure from investors. WSJ writes that many of them have been focusing on acquisitions rather than organic growth by itself. That comes after a slow period for deal making last spring because of the COVID-19 pandemic’s rapid onset.

WSJ writes that companies struck more deals valued at more than $1 billion recently as opposed to the year before. That includes those done by Microsoft, which bought out artificial intelligence firm Nuance Communications for $16 billion, along with AT&T’s decision to merge its WarnerMedia business company with Discovery. There was also the Visa deal to merge with Tink, the Swedish payments provider, for $2 billion.

Companies have been seeing more financial fuel than usual with help from a variety of means, including near-zero interest rates, the stimulus payments doled out earlier in the year, and more investor demand for corporate debt. And investments have been up, with high-rated U.S. companies raising $817.16 billion in debt in the first six months of the year.

PYMNTS has reported on the record levels of deals, with the number of M&A deals hitting records for three months in a row ending in May of 2021. The report says the trend occurred because of the aforementioned low interest rates, along with rising stock prices and more interest in making deals.

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