VALUE OF GLOBAL M&AS

Volume falls to US$309b in US and US$343b in Europe but rises to US$226b in Asia

NEW YORK/LONDON

THE value of mergers and acquisitions globally dropped slightly in the third quarter of this year, as big deals worth more than US$10 billion (RM42.25 billion) were scarce given uncertainty about economic policy in the United States and Europe in particular, leaving dealmakers to feast on a plethora of smaller transactions.

Even as major stock markets continued to climb higher, big companies were wary of pursuing transformative deals in the quarter, as the future of US President Donald Trump’s agenda on taxes, healthcare and infrastructure spending remained unclear, while Britain’s Brexit talks, and North Korean’s nuclear ambitions also weighed on chief executives’ appetite to take risks.

“Jumbo deals have subsided in part because of the continued uncertainty over tax policy and deregulation — removing that overhang would be a positive catalyst for M&A,” said Matt McClure, Americas head of mergers & acquisitions at Goldman Sachs Group Inc. “Even if it becomes clearer that the status quo isn’t going to change soon, you may see companies revisit larger transactions that they have put on hold.”

The value of global merger and acquisitions slipped to US$765 billion in the third quarter, down five per cent year-on-year and the lowest third-quarter level since 2013, according to preliminary Thomson Reuters data.

“It’s a big bet to pursue a megadeal in this environment and boards need more time to act. For sub-US$5 billion deals, instead, there are fewer hurdles and it’s easier to get to the finish line,” said Steven Baronoff, chairman of global M&A at Bank of America Corp.

The biggest deal to be signed in the third quarter was the US aerospace and industrial company United Technologies Corp’s US$30 billion cash-and-stock acquisition of US avionics maker Rockwell Collins Inc.

Third-quarter M&A volume fell to US$309 billion in the US, down six per cent year-on year. In Europe, M&A totalled US$343 billion, down 15 per cent year-onyear,