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Aug 19, 2010

M&A roars back in August

Intel joins BHP Billiton and RSA in rush of activity

This month could break records for August deal activity following a surge in M&A announcements, according to data from Thomson Reuters.

By Friday, M&A volume had climbed to $197.6 bn for the month, states Thomson Reuters’ weekly deals report. The record volume for August came in 2006, when deal volume reached $260 bn.

August is typically a slow month for M&A activity, as bankers and senior management are often away on holiday. This year, however, August has seen big deals proposed across a variety of sectors.

In the technology sector, Intel has announced it will acquire security software company McAfee for $7.7 bn. This follows BHP Billiton’s $40 bn hostile bid for Potash Corporation of Saskatchewan, the Canadian fertilizer company, which was launched on Wednesday.

‘The thing we were most nervous about was word getting out that negotiations were taking place,’ says Kevin Sellers, vice president of finance and director of IR at Intel, in an email. ‘So once an agreement was reached, we just executed it as quickly as we possibly could.’

Other deals include a £5 bn ($7.8 bn) offer for the general insurance business of Aviva, a UK insurance firm, from rival RSA.