Cross-Border Dealmaking Plunges as Companies Look Inward
Cross-Border Dealmaking Plunges as U.S. Companies Look Inward
(Bloomberg) -- U.S. companies haven’t been this insular in their dealmaking in years.
Cross-border takeovers involving U.S. firms fell 48% in the first half of the year to $204 billion, data compiled by Bloomberg show. That’s the lowest volume for a six-month period since the first half of 2014. None of the top 10 deals announced in the U.S. this year involved a foreign buyer or seller, compared with as many as four of the top 10 in recent years.
Some of the biggest cross-border deals this year never got across the finish line. In March, Canada’s Barrick Gold Corp. withdrew a $17.8 billion hostile bid for U.S. rival Newmont Mining Corp. that would have created the world’s largest gold producer. Las Vegas casino operator Wynn Resorts Ltd. was negotiating a $7 billion takeover of Australian rival Crown Resorts Ltd., only to see it fall apart after the talks leaked in April.
“People are being more cautious in general,” said Johannes Groeller, a London-based partner in PJT Partners Inc.’s strategic advisory group. “As deals get harder to close, corporates are thinking twice about starting something.”
Things have changed a lot since 2018, when the biggest transaction globally was the $62 billion takeover of Shire Plc by Japan’s Takeda Pharmaceutical Co.
Cross-border dealmaking is falling to historic lows due to U.S.-China trade tensions and fragmented politics in Europe, according to Mark Shafir, global co-head of mergers and acquisitions at Citigroup Inc. The biggest deal this year was United Technologies Corp.’s planned combination with defense giant Raytheon Co., followed by Bristol-Myers Squibb Co.’s $74 billion acquisition of pharmaceutical firm Celgene Corp.
“It has become sort of a regional market,” Shafir said in a Bloomberg Radio interview last month. The “more mercantile world that we live in has had an impact.”
--With assistance from Liana Baker.
To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Nabila Ahmed in New York at nahmed54@bloomberg.net
To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, Ben Scent, Matthew Monks
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