Mergers and acquisitions activity globally showed few signs of improvement in the third quarter but a rebound in volumes in the US – the world's biggest investment banking market – gave deal-makers hope of a sustained recovery in the near term.
The total value of M&As fell to $717.4 billion during the September quarter, according to data from Dealogic, from $738.1 billion last year during the same period.
US deal making contributed to a larger-than-usual share of global activity and offset a decline in volumes in Europe and Asia Pacific, accounting for about half of global volumes.
“My outlook is stable – we're going to continue to see a steady flow of deals. We're not going to see the craziness that we had in 2021. But on the other hand, I think all these predictions of the demise of M&A are overblown,” said Melissa Sawyer, global head of M&A at law firm Sullivan & Cromwell.
US dealmakers advised on deals worth $356.51 billion during the quarter – a 35 per cent jump from the same period last year. Deal volumes in Europe and Asia Pacific fell 31 per cent and 9 per cent, respectively.
Investment bankers and M&A lawyers blamed forces such as high interest rates, increased antitrust scrutiny, and a looming US federal government shutdown for the sluggish pace of activity, but pointed out that cash-flush buyers have started to fight through the market conditions to go after sizeable targets.
This could lead to more hostile and unsolicited approaches from well-capitalised buyers, they said, pointing to examples like Cleveland-Cliffs' $7.3 billion bid for US Steel.
“There is a good amount of pent-up demand for M&A. In 2023, the deals that are getting done are more like perfect fit deals. The buyer is the right buyer for the business, and they're paying premium multiples for it. The year 2024 seems to be setting up to be more significant,” said Tony Kim, co-president of investment banking at Centerview Partners.
The financing environment for leveraged buyouts remained challenging as central banks maintained high interest rates, forcing private equity firms to use solutions, like earn-out structures and contingent value rights (CVRs), to reconcile price differences.
Roark Capital's $9.55 billion buyout of sandwich chain Subway, for instance, included an earn-out structure.
To date, private equity deal volumes have slumped 48 per cent to $313.73 billion, compared with the same period last year.
“Funding conditions have stabilised and IPO [initial public offering] markets are opening up, so the sentiment is constructive and private equity is preparing to get back to work,” said Andre Kelleners, head of EMEA M&A at Goldman Sachs.
We're going to continue to see a steady flow of deals. All these predictions of the demise of M&A are overblown
Melissa Sawyer,
global head of M&A, Sullivan & Cromwell
Deal activity driven by activist shareholders was muted as several big-name activists reached settlements with corporate boardrooms. Large investment banks fired staff by the thousands as overall activity remained well below the peaks of 2021.
Deal making in technology, which typically accounts for the largest share of deal volumes, has fallen 51 per cent so far this year. Those declines were partially offset by a 25 per cent jump in volumes from the healthcare sector where large pharma companies paid rich premiums for attractive biotech targets.
“The view looking forward out of the windscreen is very different from the scene looking at the rear-view mirror. It’s very consistent with historical trends where after a boom year like 2021, it takes about two years for the market to bottom out, settle and find its footing – and we are seeing that,” said Naveen Nataraj, co-head of US Investment Banking at Evercore.
Cisco System's $28 billion takeover of Splunk, GTCR's $18.5 billion deal for the merchant services business of Fidelity National Information Services, and Smurfit Kappa Group's $11 billion acquisition of US rival WestRock were the largest deals of the third quarter.
Dealmakers cautioned that the ever-growing complexity of the antitrust regulation globally would force a fewer number of mega-deals, with global volumes expected to be driven by more deals valued between $1 billion to $10 billion in the near term.
“For years, it’s been the European regulatory process that has been difficult to navigate. Now … it's obviously very difficult in the US, and it is much more unpredictable,” said Rob Kindler, global chairman of the M&A group at Paul, Weiss, Rifkind, Wharton & Garrison.
Large private equity firms that have raised record amounts of capital in recent years are under increasing pressure to use those funds for deal-making despite current rates, thus potentially leading to a significant number of take-private deals and debt-fuelled buyouts in the near term, deal advisers said.
To overcome recent challenges in raising debt that is used to support acquisitions, private equity firms wrote bigger equity cheques to bankroll deals, rolled over stakes in existing companies that were targeted by other sponsors, acquired companies with portable debt structures, and took private several publicly-listed companies in which they already owned sizeable stakes.
“The next two years have the potential to be peaks of M&A exit activity for private equity compared to history. Funds need to return money to investors,” said Eamon Brabazon, co-head of EMEA M&A at Bank of America.
Investment bankers said lenders are starting to open up their balance sheets as billions of dollars of hung debt are getting sold to investors, but cautioned against expectations of a full-blown recovery anytime soon.
“The gap between buyer and seller expectations is narrowing – eventually it'll be close enough where they'll overcome the headwinds that exist,” said Anton Sahazizian, global head of M&A at Moelis & Co.
About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
Sector: Technology/Social media
Funding to date: Estimated $300,000 from Hub71 in-kind support
Fitness problems in men's tennis
Andy Murray - hip
Novak Djokovic - elbow
Roger Federer - back
Stan Wawrinka - knee
Kei Nishikori - wrist
Marin Cilic - adductor
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Global state-owned investor ranking by size
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Canada
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UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The specs
Engine: 2-litre 4-cylinder and 3.6-litre 6-cylinder
Power: 220 and 280 horsepower
Torque: 350 and 360Nm
Transmission: eight-speed automatic
Price: from Dh136,521 VAT and Dh166,464 VAT
On sale: now
if you go
The flights
Flydubai offers three daily direct flights to Sarajevo and, from June, a daily flight from Thessaloniki from Dubai. A return flight costs from Dhs1,905 including taxes.
The trip
The Travel Scientists are the organisers of the Balkan Ride and several other rallies around the world. The 2018 running of this particular adventure will take place from August 3-11, once again starting in Sarajevo and ending a week later in Thessaloniki. If you’re driving your own vehicle, then entry start from €880 (Dhs 3,900) per person including all accommodation along the route. Contact the Travel Scientists if you wish to hire one of their vehicles.
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
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%3Cp%3E%3Cstrong%3EUAE%20fixtures%20%20%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMonday%2C%20June%2019%20%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3ESri%20Lanka%20v%20UAE%2C%20Queen%E2%80%99s%20Sports%20Club%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EWednesday%2C%20June%2021%20%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3EOman%20v%20UAE%2C%20Bulawayo%20Athletic%20Club%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFriday%2C%20June%2023%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3EScotland%20v%20UAE%2C%20Bulawayo%20Athletic%20Club%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ETuesday%2C%20June%2027%20%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3EIreland%20v%20UAE%2C%20Bulawayo%20Athletic%20Club%3C%2Fp%3E%0A
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
The biog
Fast facts on Neil Armstrong’s personal life:
- Armstrong was born on August 5, 1930, in Wapakoneta, Ohio
- He earned his private pilot’s license when he was 16 – he could fly before he could drive
- There was tragedy in his married life: Neil and Janet Armstrong’s daughter Karen died at the age of two in 1962 after suffering a brain tumour. She was the couple’s only daughter. Their two sons, Rick and Mark, consulted on the film
- After Armstrong departed Nasa, he bought a farm in the town of Lebanon, Ohio, in 1971 – its airstrip allowed him to tap back into his love of flying
- In 1994, Janet divorced Neil after 38 years of marriage. Two years earlier, Neil met Carol Knight, who became his second wife in 1994
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
UNpaid bills:
Countries with largest unpaid bill for UN budget in 2019
USA – $1.055 billion
Brazil – $143 million
Argentina – $52 million
Mexico – $36 million
Iran – $27 million
Israel – $18 million
Venezuela – $17 million
Korea – $10 million
Countries with largest unpaid bill for UN peacekeeping operations in 2019
USA – $2.38 billion
Brazil – $287 million
Spain – $110 million
France – $103 million
Ukraine – $100 million
Tour de France
When: July 7-29
UAE Team Emirates:
Dan Martin, Alexander Kristoff, Darwin Atapuma, Marco Marcato, Kristijan Durasek, Oliviero Troia, Roberto Ferrari and Rory Sutherland
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Need to know
The flights: Flydubai flies from Dubai to Kilimanjaro airport via Dar es Salaam from Dh1,619 return including taxes. The trip takes 8 hours.
The trek: Make sure that whatever tour company you select to climb Kilimanjaro, that it is a reputable one. The way to climb successfully would be with experienced guides and porters, from a company committed to quality, safety and an ethical approach to the mountain and its staff. Sonia Nazareth booked a VIP package through Safari Africa. The tour works out to $4,775 (Dh17,538) per person, based on a 4-person booking scheme, for 9 nights on the mountain (including one night before and after the trek at Arusha). The price includes all meals, a head guide, an assistant guide for every 2 trekkers, porters to carry the luggage, a cook and kitchen staff, a dining and mess tent, a sleeping tent set up for 2 persons, a chemical toilet and park entrance fees. The tiny ration of heated water provided for our bath in our makeshift private bathroom stall was the greatest luxury. A standard package, also based on a 4-person booking, works out to $3,050 (Dh11,202) per person.
When to go: You can climb Kili at any time of year, but the best months to ascend are January-February and September-October. Also good are July and August, if you’re tolerant of the colder weather that winter brings.
Do not underestimate the importance of kit. Even if you’re travelling at a relatively pleasant time, be geared up for the cold and the rain.
The specs: 2018 BMW X2 and X3
Price, as tested: Dh255,150 (X2); Dh383,250 (X3)
Engine: 2.0-litre turbocharged inline four-cylinder (X2); 3.0-litre twin-turbo inline six-cylinder (X3)
Power 192hp @ 5,000rpm (X2); 355hp @ 5,500rpm (X3)
Torque: 280Nm @ 1,350rpm (X2); 500Nm @ 1,520rpm (X3)
Transmission: Seven-speed automatic (X2); Eight-speed automatic (X3)
Fuel consumption, combined: 5.7L / 100km (X2); 8.3L / 100km (X3)
Major matches on Manic Monday
Andy Murray (GBR) v Benoit Paire (FRA)
Grigor Dimitrov (BGR) v Roger Federer (SUI)
Rafael Nadal (ESP) v Gilles Muller (LUX)
Adrian Mannarino (FRA) Novak Djokovic (SRB)
THE BIG MATCH
Arsenal v Manchester City,
Sunday, Emirates Stadium, 6.30pm
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