This is only the second time on record that technology deals accounted for the maximum number of M&A deals made in a year. The year 2000 saw the highest number of deals in the technology sector with M&A activity worth over $289bn taking place.
Over 4,100 deals have been announced this year so far, up seven per cent on 2015 when 4,496 deals worth $250.6bn were revealed.
The US is leading global technology M&A in 2016 with deals worth $125.8bn unveiled, its second highest record behind 2000 ($198.7bn). Its share of global volume stands at 47 per cent while deals announced by Chinese acquirers account for 32 per cent ($85.5bn). Dealogic said the US has overtaken China as the top acquiring nation globally.
On Monday, Microsoft announced it’s acquiring professional social network LinkedIn in a $26.2bn deal. The deal is the largest ever acquisition by the software company and the fourth largest M&A deal announced this year. It is also one of only 10 M&A deals announced in the technology sector valued at $20bn or more. Prior to the Microsoft-LinkedIn deal, volume in the M&A sector was down four per cent year-on-year.
In a memo to staff, Microsoft boss Satya Nadella said: “This deal brings together the world’s leading professional cloud with the world’s leading professional network. I have been learning about LinkedIn for some time while also reflecting on how networks can truly differentiate cloud services. It’s clear to me that the LinkedIn team has grown a fantastic business and an impressive network of more than 433m professionals.”
The acquisition sent shares in Twitter soaring five per cent amid speculation that it could be heading towards a takeover.
Yesterday, Twitter’s newly returned CEO Jack Dorsey revealed that the tech giant took a $70m stake in music streaming service SoundCloud earlier this year.
Speaking to tech website Recode, Dorsey said: “They’ve [SoundCloud] been great partners of ours over the years and their community-supported approach mirrors ours in many ways.”
The embattled social network, which saw its shares drop to an all-time low of $13.90 in March, is yet to make a profit.