Contact: Brenon Daly
Spending on tech deals in the just-completed month of May fell by half from the same month in the previous year, amid renewed concerns about US growth and European economic stability. Overall, the total value for all tech acquisitions announced around the globe last month hit just $15.3bn, with the number of transactions dipping 10% (year over year) to 302. The aggregate value of deals stands as the lowest total for the month of May in eight years.
The weakness in May means that spending has now dropped in four of the five months in 2012, compared with 2011. That has dragged down the total value of transactions announced so far this year to just $64bn – one-third below the first five months of 2011.
The growing economic worries also weighed on Wall Street, with the major stock indexes dropping about 7% last month. Specific to tech companies, bellwethers such as Cisco Systems, Dell and NetApp all reported weaker-than-expected quarterly results in May. Of those three tech giants – all of which lost about one-fifth of their market value in May – only Cisco announced an acquisition last month.