Bloomberg News reports that most at risk are so-called mega-mergers, valued at $10bn or more, analysts led by Conor Fitzgerald said Wednesday in a note to clients. More than $370bn worth of deals that had already been announced were canceled in the second quarter alone, according to data compiled by Bloomberg.
Antitrust scrutiny, a crackdown by the U.S. Treasury on so-called inversion deals and national security concerns are the main reasons that deals are breaking down, according to the note. One of the most high-profile transactions to unravel this year was Allergan and Pfizer walking away from a $160bn deal that would have moved the combined company’s headquarters to Ireland. On Wednesday, Energy Transfer Equity LP and Williams Cos. broke off their $33bn agreement.
“Failed deals can have a dampening effect for consolidation,” Fitzgerald wrote in the note. “Given the time and risk that goes into announcing an M&A transaction, buyers and sellers desire a high degree of certainty that their deals will close.”
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