A $56 Billion Thanksgiving Deal Feast to Make Bankers Fat

Tara Lachapelle

27 Nov 2019, 07:26 AM IST

(Bloomberg Opinion) -- It’s the time of year to give thanks, especially if you’re a mergers-and-acquisitions banker.

In what marks the merger-est Monday of 2019, the stock market awoke to four large deals, while a fifth — potentially the biggest leveraged buyout of all time — still looms. The pre-Thanksgiving holiday dealmaking frenzy centers on U.S. targets that span numerous industries: Online brokerages Charles Schwab Corp. and TD Ameritrade Holdings Corp. agreed to combine in a $26 billion all-stock merger; luxury conglomerate LVMH Moet Hennessey Louis Vuitton SE is acquiring retailer Tiffany & Co. for about $18 billion; Novartis AG is buying Medicines Co., the developer of a cholesterol-lowering drug, for $7.7 billion; and EBay Inc. is selling its StubHub tickets business for about $4 billion to Viagogo Entertainment Inc. That’s as KKR & Co. has reportedly approached Walgreens Boots Alliance Inc. about taking the $54 billion pharmacy chain private.

Nearly $2.7 trillion of deals were struck globally so far this year, as a merger wave now long in the tooth continues into 2020. The M&A market’s tenacity — in the face of a trade war with China, a spate of high-profile merger-related writedowns and deal duds and the possible impeachment of the leader of the free world — is pretty stunning.

A $56 Billion Thanksgiving Deal Feast to Make Bankers Fat

An index that measures CEO confidence, often looked to as an indicator of the M&A market, has slipped to levels not seen since 2016. But the S&P 500 index touched a new high on Monday, and Ebitda multiples remain elevated. Meanwhile, billions of dollars in banker fees have been generated even though dealmaking was already expected to slow. Those with the largest shares of the pie are Goldman Sachs Group Inc., JP Morgan Chase & Co. and Morgan Stanley.

The feast will end sooner or later, but for now, the oven’s still hot. The question remains, though: Will investors later feel they got burned?

To contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.