ZEENAT MOORAD: What’s behind the dearth in mergers?
Locally there were fewer megadeals in 2018 thanks to the economy’s dismal performance and the risk-off sentiment towards emerging markets in general
It’s apparently not the year for big fat deals. That’s if forecasts are to be believed. Merger & acquisition (M&A) value is predicted to come in at $2.9-trillion for 2019 — down from $3.1-trillion in 2018, says the Global Transactions Forecast issued by global law firm Baker McKenzie and Oxford Economics. It is little wonder, given the increasingly risk-averse climate and geopolitical, trade and tariff uncertainties. Last year’s record M&A activity had many wondering just how long it would last. Global corporate tie-ups came amid relatively low borrowing costs, record stock prices and buoyant consumer confidence. The largest deals of 2018 included the takeover of Keurig Green Mountain Inc of Dr Pepper Snapple Group Inc for $26.6bn, Takeda Pharmaceutical Co’s $79.7bn takeover of US biotech firm Shire, and T-Mobile’s $60.8bn merger with Sprint Corp. For the uninitiated: M&A deals usually result in two companies consolidating to form a new company; in the dissolution of one company aft...
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