Outbreak fuels pandemic recovery as third-quarter M&A breaks all records

Texas News Today

FILE PHOTO: Traders work on the trading floor of Barclays Bank in Canary Wharf, London, UK on December 7, 2018. Reuters / Simon Dawson / FILE PHOTO

September 30, 2021

By Pamela Barbaglia and Anirban Sen

LONDON (Reuters) – Global mergers and acquisitions rank third as companies and investors shape the post-COVID future through transformational transactions, while advisors struggle to cope with unprecedented trading volumes that hit record highs in the quarter.

According to Refinitiv data, the sweltering heat of merger activity generated $1.52 trillion worth of transactions in the three months to September 27, up 38% from the same quarter last year, and no other record. more than a quarter.

Third-quarter trading volumes pushed global M&A activity to an unprecedented $4.33 trillion in the first nine months of 2021, surpassing the record $4.1 trillion recorded before the 2007 financial crisis. Investment banks have been forced to overwork and increase overwork payments. Unhappy junior employee.

Birger Berendes, co-head of M&A at Bank of America’s EMEA, said:

“Investors are full of cash and want companies to buy into areas they need to grow and add features and services, as well as pay dividends and buy back shares.”

Europe doubled its volumes in the third quarter, with M&A transactions of $473 billion compared to the same quarter last year. Meanwhile, the United States rose 32% to $581 billion and the Asia Pacific region rose 21% to $365 billion.

“M&A is a credit scam. Dirk Albersmeier, Global Co-Head of M&A at JP Morgan, said:

“Investors are sensitive to factors such as inflation, interest rate trends and increased regulatory scrutiny,” he said.

Future tax reforms by US President Joe Biden are likely to increase transaction costs, but top M&A bankers said they do not expect a slowdown in transactions in the short term.

“The new tax system is also not debatable. It does not affect transactions. It probably reflects how people feel about the prospects for next year,” said law firm Latham & Watkins LLP. M&A Partner Mark Bekhet said.

The market is facing adverse conditions for blank check companies, but the $32.6 billion SPAC transaction led by Lionheart Acquisition Corp II of US firm MSP Recovery outperformed the quarterly charts.

Other major deals include a post-paid acquisition of Square for $29 billion, a spin-off of Vivendi to Universal Music Group and a £18.4 billion attack by Anten, owner of US sports betting company DraftKings Ladbrokes. This.

animal spirits

The progress Western countries have made to vaccinate the adult population and the relaxation of COVID restrictions during the summer is sparking a war of words between private equity firms to control listed companies, including British supermarket conglomerate Morrisons. broke and gave air to the souls of animals.

Private equity purchases rose 133% to $818 billion in the first nine months of the year as investment companies often ran out of cash and made higher payouts to steal assets from the public market. I did

Bankers say private equity firms have learned to calculate risk after the financial crisis.

“At this point, we have a clear belief that the valuation is too high. The Group of Financial and Strategic Investors at Goldman Sachs at EMEA said it is looking for opportunities to be confident it will add value. The person in charge, Anna Skoglund, said.

“We have moved from opportunistic and more affordable transactions to thematic investments and platform building.”

Buying is expected to continue as the Federal Reserve’s bond-buying program has helped keep interest rates record low and provide cheaper credit loans to potential buyers.

Mark Shafir, Global Co-Head of M&A, Citigroup said:

“There is an incredibly favorable bond market in terms of rates and availability, so there are lots of opportunities for trading.”

Carpe Diem

Energy and power, particularly the technology industry, along with most sectors of the economy, where software more than tripled in the first nine months of this year, and companies are accelerating the transition to renewable energy projects as part of the transition. Transactions increased. For the future of Net Zero.

Dealers say that with careful consideration of risks, corporate buyers are agile to seize opportunities and become more competitive with private equity in fast-paced auctions.

“The board continues to evaluate a number of options to implement our strategic goals,” said Umar Farooqui, co-head of EMEAM&A at Barclays.

As a threat to active shareholders, bankers will also include spin-offs in their future pipelines to uncover value trapped in profitable units and take advantage of a vibrant stock market. It says

The Activist Fund closely monitors how companies are tackling the challenge of adapting their business models to the post-COVID world and this will be a key factor in driving change.

“Market turmoil causes a decline in activism. Not surprisingly, when a pandemic happened, you saw a real shock,” said David of Morgan Stanley, managing director of Activist Defense Group. Rosewater said .

“When the market came back, you saw activation coming back and rewarding additional opportunities.”

(Reporting by Pamela Barbaglia in London and Anirban Sen in Bangalore, edited by Matthew Lewis)

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