A bang and a whimper: global M&A

Published:2016-08-16    Source:

After a boom in 2014 and 2015, global dealmaking is limping along. Transactions in June and July were worth $692 billion, down by 29% on the prior year, according to Dealogic. This is despite the fact that American share prices are higher than a year ago and borrowing costs lower. Antitrust regulators have become more aggressive.

The European Union has just said it will investigate the $130 billion marriage of Dow Chemical and DuPont. Geopolitical strains are hobbling deals, too: last week Australia rejected two Chinese bids for a utility on national-security grounds.

The populist mood isn’t helping. America is cracking down on “inversions”—deals designed to cut tax bills—and Britain’s new government plans to take a more protectionist stance. Jittery bosses plotting takeovers are watching America’s political race closely: few like the idea of a President Trump, even if his autobiography is entitled “The Art of the Deal”.