2015 was the year of M&A: some $5 trillion in global merger and acqusition deals were announced, the highest level ever, topping even pre-crash 2007. In fact, last year there were more mega-deals, those valued at $20 billion or above, than ever. In all, there were 17 deals at or above that value compared with 35 such deals in the five years from 2010 through 2014. Such was the cheap debt-fuelled boom in large deals that the average size of all M&A valued at $500 million or above was $3.3 billion, up from $2.2 billion in 2014.
However, as Bloomberg observes, this year M&A is hitting a more dubious record: deals gone bust as some 10%, or $504 billion, of all deals announced last year have been terminated following a furious crackdown by the US Treasury on tax inversions which killed what would have been the biggest M&A deal ever, Pfizer's acquisition of Allergan, as well as numerous other deals found to have been anti-competitive by the FTC.
Wednesday was especially bad for bankers as two mergers valued at a combined $21 billion collapsed. The latest cancelled deals mean 2015 has been stripped of its title as the biggest year for dealmaking, dropping to $4.06 trillion compared with 2007’s $4.09 trillion.
Size isn’t the only factor drawing scrutiny. Antitrust enforcers at the Justice Department in April frustrated Canadian Pacific Railway Ltd.’s bid to buy Norfolk Southern Corp., opposing a voting trust structure that called for Canadian Pacific’s chief executive to run Norfolk Southern....MORE