FAST FIVE: Dealmakers Keep Distance As Pandemic Crushes Global M&A To Decade Lows
Dealmakers Keep Distance As Pandemic Crushes Global M&A To Decade Lows Tyler Durden Wed, 07/01/2020 – 04:15 Global mergers and acquisitions activity fell to its lowest levels in more than a decade in 1H20, as paralyzed dealmakers were unwilling to explore new opportunities as uncertainty plagued capital markets. Data compiled by Bloomberg shows the value of M&A activity plunged 50% to $1 trillion in the first half from the year-earlier, marking the slowest period in dealmaking since 2012.
h/t Bloomberg The first half in global capital markets was chaos – lockdowns and virus pandemic crippled supply chains and crushed consumers that will likely result in a recovery phase over several years.
h/t Bloomberg M&A activity in Europe, the Middle East, and Africa was down 32% during the period. Large transactions that helped prevent a more dramatic drop include the $19 billion leveraged buyout of Thyssenkrupp AG's elevator unit by Advent International and Cinven.
There was also a recent flurry of activity in the Middle East, including Abu Dhabi's sale of a $10.1 billion stake in its gas pipeline network that ranks as the biggest infrastructure transaction of the year.
As we noted in October 2020, “WeWork's catastrophic failed IPO had damaged capital market sentiment” – likely the markings of an early top. We also said back then: “A slowdown in M&A deals is an ominous sign that Wall Street banks will see declining revenues in the quarters ahead.” With that being said, depressed M&A activity this year suggests a V-shaped recovery is not possible in the second half of the year. .