Author: Gordon Platt
Some of the year's biggest announced deals have come apart at the seams.

Mergers and acquisitions in 2014 are being announced at the fastest pace since the financial crisis of 2008–2009, but broken deals are also setting records for the same period. In the year to date through the first week of August, $2.5 trillion of deals had been announced, but $428 billion were withdrawn, according to Thomson Reuters.

Ryan Preclaw, strategist at Barclays, says there is little doubt that M&A will reach a relative peak this year. “Even if the second half of this year has volumes identical to the second half of 2013, this year will be the second-highest on record,” he says.

“Given the already exceptional pace of dealmaking so far this year, it would not be shocking (or inconsistent with our model) if we were to continue to an all-time peak,” Preclaw notes, indicating that a lot of the biggest deals are still to come.

However, according to consultancy Deloitte, completing deals is becoming ever more complex. “Increased scrutiny requires larger deals, particularly cross-border ones, to consider a wider group of stakeholders,” Deloitte noted.

One of the largest broken deals this year was Pfizer’s $118 billion bid for rival AstraZeneca of the UK. Pfizer, the largest US drugmaker, abandoned the deal in late May after AstraZeneca’s board rejected the unsolicited offer. The deal had stirred political concern about the potential loss of jobs and tax revenues. Pfizer could make another bid after a six-month cooling-off period under UK law.

During the first week of August, 21st Century Fox deserted its $80 billion bid for Time Warner (at least for the time being), and Sprint dropped its $32 billion offer for T-Mobile. Meanwhile, the US Public Service Commission criticized the proposed merger of Comcast and Time Warner Cable, saying it had “no net-positive benefit” to consumers. That deal could still go ahead, however, if requested changes are made.

Cross-border M&A more than doubled in the first half of 2014 from the same period a year earlier. Tim Gee, global head of M&A at law firm Baker & McKenzie, says: “Powerful macroeconomic and political forces continue to provide impetus to globalization, and companies around the world are driven by their strategies to move into new markets and jurisdictions. In the vast majority of these instances, these moves are positive.”

In the first quarter, FT Remark, a bespoke research product from the Financial Times, surveyed 350 C-level executives on behalf of Baker & McKenzie about their most recent cross-border deals. Some 86% described the transactions as a success.

Martyn Curragh, PwC’s US deals leader, says PwC is seeing a more confident base of CEOs who are more upbeat on the global environment but are also focused on the forces affecting their markets, industries and customers. “As a result, corporates are being aggressive in their pursuit of quality assets that align with their differentiated capabilities, bring synergies and deliver revenue growth.” Nearly half of the total US deal value in the first six months of 2014 was composed of transformational deals—or those that will not just offer cost and profit benefits but also initiate fundamental operational change in the acquiring organization—each valued at $10 billion or more.