Mega Mergers And Acquisitions Stymied By Coronavirus Outbreak
HONG KONG: Mergers and acquisitions, so much a part of the IT sector in the past decade, particularly in the semiconductor industry, have all but come to a halt.
Data company Refinitiv says that, for the first time since September 2004, no merger and acquisition deal worth more than US$1 billion was announced worldwide last week.
Mega deals are becoming a common part of the information technology scene, but China’s eventual approval of Nvidia’s takeover of rival Mellanox appears likely to be the last for some time.
Refinitiv says worldwide merger activity is down 33 percent from a year ago and – at US$762.6 billion – the lowest year-to-date amount for deal-making since 2013.
The number of deals also fell 20 percent year-on-year as coronavirus continues to wreak havoc on every aspect of our lives as well as on global business.
Companies have been walking away from announced transactions amid changed deal conditions and high levels of uncertainty, while regulators worldwide, including Australia, have also toughened rules for foreign investments to protect national assets.
It’s not likely to last though, with 56 percent of more than 2900 executives surveyed globally by consultancy EY, planning an acquisition in the next 12 months, as they look beyond the current crisis.