For the first time since September 2004, no merger and acquisition deal worth more than $1 billion was announced worldwide last week, according to data provider Refinitiv, as the new coronavirus stifles global M&A.
The dearth of mega deals comes as countries across the world have shut down large swathes of their economies as they battle the COVID-19 pandemic that has infected over 2.33 million people and claimed 165,000 lives.
Worldwide merger activity so far this year is down 33 per cent from a year ago and at $762.6 billion is the lowest year-to-date amount for dealmaking since 2013, the data showed. The number of deals also fell 20 per cent year-on-year.
“We anticipate that there may be fewer signed deals announced this quarter as parties take longer to work through the impact of the COVID-19 situation,” said Robert Wright of law firm Baker McKenzie’s Asia-Pacific M&A group.
“However, where parties have completed underlying due diligence processes and where there remain strong fundamentals, we do expect to see a number of these deals to come back online.”
Companies have been walking away from announced transactions amid changed deal conditions and high levels of uncertainty. Canada’s Alimentation Couche-Tard Inc on Monday said it would shelve its $5.6 billion buyout of petrol station operator Caltex Australia Ltd, as fuel demand plunges and as companies look inward to get through the crisis. (Source: ndtv.com)