The availability of debt has pushed the total value of company takeovers close to that of IPOs on European stock markets.
Some $30.8bn (£23.2bn)-worth of companies were bought out in the last year, while $34.5bn of new money was raised on European stock markets, according to figures from Dealogic.
The differential is the closest it has been since more risky bonds and loans were popular in 2008. Some €85bn (£75.9bn) of leveraged loans have been taken out in Europe during the first three quarters of 2017, compared with €71bn throughout the whole of 2016.
The FT reports that pensions funds are among those driving this boom in buyouts, as they search for higher yields using riskier loans. PE firms have been able to set themselves better terms owing to the influx of funding available.
With their extra buying power, PE firms are also considering taking public companies private.
Mergermarket’s summer report into the H1 2017 global M&A market reported an 8.4% increase in the total value of deals compared with a year earlier. European M&A “surged ahead” to represent 32.3% of the global total value during the period.
Deals are being driven by sectors trying to restructure, drive efficiencies and upgrade technology. Energy, mining and utilities saw the most M&A activity by value, at $267.9bn across 662 deals – a 51.9% increase over the same period in 2016.