Dealmakers Face Fresh Risks Chasing $5 Trillion-Plus M&A Record Michelle F. Davis and Ryan Gould Dealmakers have ground to make up as they chase a record year of mergers and acquisitions, after a slower third quarter brought fresh challenges that cost Wall Street some momentum. The value of announced deals in the three months through September dipped roughly 10% year-on-year, according to data compiled by Bloomberg.
But with $3.8 trillion of transactions over the year to date, companies and their advisers could yet top the $5 trillion-plus record M&A haul of 2021. To do that they’ll need to manage a series of complications, including the prospect of a new rate-hiking cycle, rising levels of anxiety around the risks of artificial intelligence, and US midterm elections that could impact timetables for some larger deals. Ben Wilson, co-head of North America M&A at JPMorgan Chase & Co. in New York, said: “I expect the momentum we saw in the first half of the year to continue, albeit at a more measured pace.” The industrial logic behind many of the transactions that haven’t happened yet remains intact.
Dealmakers have grown accustomed to transacting in tricky periods in recent years, whether through conflicts in Europe and the Middle East that have disrupted global supply chains, or tariff spats that have upended established trading partnerships. Among the latest headaches is the potential for aggressive central bank rate hiking to combat inflation spurred by the Iran war, which is entering its eighth month. The Federal Reserve in September raised rates for the first time in more than three years — a decision that could have knock-on effects in the financing market for deals and leveraged buyouts.
Still, advisers including Jenny Hochenberg, global co-head of M&A at Freshfields, say there is still a strong desire in boardrooms to pursue large and complex mergers. “There’ve been so many disruptions but they don’t seem to stick,” said the New York-based lawyer. “People view this as the once in a lifetime opportunity to get certain deals done. They’re taking advantage of a regulatory environment that’s receptive to approving deals.” Among the largest transactions struck during the third quarter were Uber Technologies Inc.’s purchase of German food-delivery company Delivery Hero SE for about €13 billion ($14.7 billion) and Alimentation Couche-Tard Inc.’s takeover of Polish convenience store chain Zabka Group SA for almost 33 billion Polish zloty ($8.6 billion). Elsewhere, Prologis Inc.’s £14 billion ($18.6 billion) buyout of London-listed real estate investment trust Segro Plc underscored the boom in UK takeovers that has taken hold this year, and a near-$10 billion sale of the NFL Super Bowl champion Seattle Seahawks was one of the highlights of an exceptionally active period for sports M&A.
Jason Greenberg, global head of investment banking strategy at Jefferies Financial Group Inc., acknowledges the perception that a large number of deals that have been possible under Trump probably wouldn’t have been under Democrats. But he doesn’t see the outcome of the midterms massively affecting deal activity through the remainder of this year and the Trump term. “Will the midterms change Congress? Probably,” said Greenberg. “Will they c...
Источник: Bloomberg Markets · Сводку подготовил HeadlinesBriefing