Takeovers are falling apart from Sydney to Switzerland, leading to a gloomy late summer for Wall Street bankers as cheap financing dries up.
More than $150 billion in mergers and acquisitions have been scrapped or stalled since the beginning of June, data compiled by Bloomberg showed. KKR on Friday confirmed a Bloomberg News report that it is abandoning a $14bn bid for Australian hospital chain Ramsay Health Care.
Swiss drug maker Novartis announced a day earlier it would spin off its $25bn generics unit after failing to draw attractive private equity bids. Merck's talks for $30bn cancer-drug maker Seagen have hit a snag over price, while Ardian is shelving a $3bn sale of Italian healthcare software provider Dedalus.
Dislocated financing markets and higher interest rates are making acquisition financing more expensive and harder to raise, said Lars Aagaard, head of Asia Pacific M&A at Barclays.
“More deals are being pulled and auction processes put on hold,” Mr Aagaard said.
“Vendors’ price expectations take some time to adjust to the new normal.”
Private equity dealmakers are struggling to get cheap credit for buyouts, as inflation and fears of an economic slowdown rock the debt markets.
Investment banks are nervous about adding more debt to the $80bn they already hold, while private lenders are pulling back on risk by cutting how much debt they are offering in a single deal.
Several transactions have been cancelled due to once-hot parts of the market falling out of favour.
In the cryptocurrency industry, Mike Novogratz’s Galaxy Digital Holdings and a lender backed by the Thai royal family both scrapped acquisitions this month.
The air has also been coming out of the market for special purpose acquisition companies.
Grooming start-up Manscaped this month terminated a $1bn deal with a blank-cheque company that was set to be backed by actor Channing Tatum. Ticketing engine SeatGeek abandoned a $1.4bn merger with a Spac backed by basketball star Kevin Durant.
Then there’s the biggest deal of them all to hit the rocks: Elon Musk’s $44bn takeover of Twitter, which is subject to a court battle after the billionaire tried to back out.
To be sure, some negotiations could be revived, particularly if market sentiment improves. Ramsay Health said on Friday it is prepared to engage with KKR to see if it can come up with another offer.
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
UAE currency: the story behind the money in your pockets
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if you go
The flights
Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes.
The hotels
Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes.
When to visit
March-May and September-November
Visas
Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.
UAE’s revised Cricket World Cup League Two schedule
August, 2021: Host - United States; Teams - UAE, United States and Scotland
Between September and November, 2021 (dates TBC): Host - Namibia; Teams - Namibia, Oman, UAE
December, 2021: Host - UAE; Teams - UAE, Namibia, Oman
February, 2022: Hosts - Nepal; Teams - UAE, Nepal, PNG
June, 2022: Hosts - Scotland; Teams - UAE, United States, Scotland
September, 2022: Hosts - PNG; Teams - UAE, PNG, Nepal
February, 2023: Hosts - UAE; Teams - UAE, PNG, Nepal
UAE currency: the story behind the money in your pockets
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SRI LANKS ODI SQUAD
Perera (capt), Mendis, Gunathilaka, de Silva, Nissanka, Shanaka, Bandara, Hasaranga, Udana, Dananjaya, Dickwella, Chameera, Mendis, Fernando, Sandakan, Karunaratne, Fernando, Fernando.
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
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The drill
Recharge as needed, says Mat Dryden: “We try to make it a rule that every two to three months, even if it’s for four days, we get away, get some time together, recharge, refresh.” The couple take an hour a day to check into their businesses and that’s it.
Stick to the schedule, says Mike Addo: “We have an entire wall known as ‘The Lab,’ covered with colour-coded Post-it notes dedicated to our joint weekly planner, content board, marketing strategy, trends, ideas and upcoming meetings.”
Be a team, suggests Addo: “When training together, you have to trust in each other’s abilities. Otherwise working out together very quickly becomes one person training the other.”
Pull your weight, says Thuymi Do: “To do what we do, there definitely can be no lazy member of the team.”
