DEFINITION of Mega Deal
The notion of a mega deal comes from the Greek megas, meaning great, this expression refers to a business deal that entails a great deal of money. Mergers and acquisitions that involve substantial amounts of money are examples of mega deals that occur with frequency in the business world. Although much merger activity happens on an ongoing basis, mega deals involve well known, established companies.
BREAKING DOWN Mega Deal
Oracle's acquisition of Sun Microsystems in a deal valued at more than $7 billion is an example of a mega-deal from late 2009. Such deals usually create a dominant player in the industry or are intended to create a well-situated conglomerate.
An interesting element of a "mega deal" is there's no universal definition. It's more that there are ranges that ebb and flow with the availability of money and industry particulars. For instance, today, a mega deal in the technology space could be north of $15B. Facebook acquired WhatsApp for $19B in 2014. For other sectors or industries, transaction sizes may be smaller but still be regarded as "mega" for their impact on the industry.
In the future, healthcare looks to be taking the lead on producing the biggest of the mega deals. In fact, in late 2017, CVS Health and the insurer Aetna announced a merger valued at a whopping $69B.
As capital markets go up, so do the purchase prices for mega deal corporate transactions.