U.S. mergers & acquisitions activity is on track for a record month in May, with $241.6 billion of deals already announced, topping the previous record of $225.8 billion announced in May 2007, according to Dealogic data.
January of 2000 ranks in third place with $212.7 billion of deals announced, according to Dealogic.
Telecoms and technology deals have dominated, including this week’s announcement that chip maker Avago Technologies Ltd. (TICKER:AVGO) is buying rival Broadcom Corp. BRCM, -0.41% for $37 billion in cash and stock. The deal would allow Avago to expand from its communications-based revenue stream into the fast-growing business of corporate data centers.
“While there is no guarantee of a repeat of 2014’s record-breaking buying spree, 2015 is poised to continue the longer-term momentum in technology deals,” PwC’s deals group wrote in a report published Friday.
Telecoms accounted for $92.2 billion, or 38%, of the May total, according to Dealogic, followed by technology with $49.2 billion of announced deals, equal to 20% of the total. Healthcare came in third place with $33.8 billion of announced deals, followed by utility and energy at $19.5 billion.
The Avago deal is the latest in a series of tie-ups in the semiconductor sector, which is enjoying strong demand for products used in such things as computer disk drives, consumer appliances and smartphones.
The next deal in the sector may be close, with the New York Post reporting late Thursday that Intel Corp. INTC, +0.02% is in talks to buy smaller rival Altera Corp. ALTR, -0.21% for about $15 billion. The paper cited a source close to the negotiations as saying Intel could pay as much as $54 a share for Altera, a 15% premium over its Thursday closing price of $46.97.
If the deal is executed, it would be Intel’s biggest ever, according to the paper.
Technology deals were already showing good momentum in the first quarter with an emphasis on the middle market and away from megadeals, said PwC.
“Middle market deals—always the mainstay of technology volumes—are expected to continue, but likely at the smaller end of the spectrum as high-valuation private rounds provide an attractive alternative to M&A exits,” it said.
Among the other notable deals in May, Charter Communications CHTR, -0.64% agreed to merge with Time Warner Cable Inc. TWC, -0.35% in a deal valued at $55 billion, and to buy Bright House Networks in a deal valued at $10.4 billion. The deal takes Charter owner John Malone into the ranks of the biggest U.S. broadband and pay-TV companies.
Verizon Communications Inc. VZ, -0.46% is buying AOL Inc. AOL, -0.02% in a $4.4 billion all-cash deal aimed at bringing Verizon into the online video marketplace and giving it access to technology developed by AOL to sell ads and deliver high-quality Web video.
In the retail sector, Ann Inc. ANN, +0.15% agreed to sell itself to Ascena Retail Group Inc. ASNA, +1.59% for about $2.2 billion in cash and stock, combining well-known women’s clothing brands Lane Bryant, dressbarn, Ann Taylor and Loft.
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