The world’s dealmakers are roughly US$1 trillion down in one of the worst years for takeovers and stock market listings in a decade.
That is the year-on-year drop in the value of mergers and acquisitions (M&As) and initial public offerings (IPOs) in the first half of the year, a period in which inflationary pressures, financing constraints and geopolitical tensions nixed activity across regions and sectors.
With the traditional summer lull on the doorstep, and fears of a recession lingering, the next six months could bring more pain on Wall Street, where banks have already been slashing bonuses and jobs in response to the slump.
Photo: Reuters/Lam Yik
“Deals are being delayed,” said Dominic Lester, head of investment banking for Europe, the Middle East and Africa at Jefferies Financial Group Inc. “Boards are having difficulty valuing assets, and are therefore taking longer to commit to transactions.”
Deal volumes are down 42 percent year-on-year at US$1.3 trillion, according to data compiled by Bloomberg. Excluding COVID-impacted 2020, that is the smallest first-half total in a decade and below the average for the period.
“Many investment banks have constrained their ability to provide debt financing, and alternative sources of debt financing are quite expensive by comparison,” Lester said.
In the past six weeks, tens of billions of dollars’ of M&As have either stalled or collapsed, ranging from the US$10 billion tie-up of satellite operators SES SA and Intelsat SA to Citigroup Inc’s US$7 billion sale of its Mexican unit. Other pending deals, including Microsoft Corp’s US$69 billion takeover of games maker Activision Blizzard Inc, face being scorched by antitrust authorities.
Meanwhile, new market listings have improved little, with companies raising just US$68 billion via IPOs in the first six months, Bloomberg-compiled data show.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS