M&As are up this year despite headwinds and heightened regulatory scrutiny

The volume of global M&A transactions rose 14% y-o-y to USD 846.8 bn by 25 September, signaling persistent appetite despite market headwinds, Reuters reports, citing Dealogic data.

What the data shows: US M&A activity took a hit, dropping 8% y-o-y to USD 338 bn, largely due to regulatory scrutiny, market volatility, and high interest rates. Asia-Pacific led the charge with a 54% y-o-y surge in transaction volume to USD 273 bn, while Europe posted a 7% y-o-y increase, reaching USD 160 bn, the data showed.

Regulatory pressures put a damper on megadeals this year: Tougher antitrust scrutiny stalled megadeals surpassing USD 25 bn, with no transactions over USD 50 bn signed this year, according to the newswire. Increased scrutiny from antitrust watchdogs is partly to blame, analysts say.

The number of mid-sized M&A transactions increased 27% y-o-y, with 12 transactions ranging from USD 5 bn to USD 10 bn taking place so far this year, up from 10 in the same period last year, according to the data.

The biggest M&A transactions this year: Mars ’ USD 36 bn acquisition of snack-maker Kellanova, Blackstone ’s USD 16 bn buyout of AirTrunk, and Verizon ’s USD 9.6 bn purchase of Frontier Communications topped 3Q 2024’s largest transactions so far.

A slowdown in 4Q? Investors are expecting transactions to slow down ahead of the upcoming US elections, though analysts expect them to rebound early in 2025 as the US Federal Reserve’s interest rate cuts gives a boost to the economy.

IN OTHER PLANET FINANCE NEWS- Asset manager Apollo Global will use funds from Abu Dhabi’s Mubadala and other sources for a new USD 25 bn private credit initiative with Citigroup, aimed at private equity firms and lower-rated US companies, the Financial Times reports. The two firms plan to finance at least USD 25 bn in loans, targeting USD 5 bn in the first year.

REMEMBER- Mubadala backed Apollo’s private credit fund earlier this year with seed investments, with the fund and Apollo’s affiliate pooling USD 290 mn into the new fund.

MARKETS THIS MORNING-

Asian markets are mostly in the green as Chinese stocks continued a streak of gains amid news of a stimulus package aimed at reviving the economy. Hong Kong’s Hang Seng index opened up 3%, while mainland China’s CSI 300 is up 2.9%. Japan’s Nikkei is also up, while the Topix and Kospi are marginally down.

Meanwhile, Wall Street futures are largely flat after a good day for the S&P 500, which notched another record high, and the Nasdaq.

THE CLOSING BELL-

The ADX stayed flat yesterday on turnover of AED 1.9 bn. The index is down 0.7% YTD.

In the green: Union Ins. Company (+8.5%), Aram (+6.0%) and Modon Holding (+3.6%).

In the red: Fujairah Building Industries (-9.7%), Bildco (-9.4%) and Hayah Ins. Company (-8.6%).

Over on the DFM, the index rose 0.8% on turnover of AED 484.8 mn. Meanwhile Nasdaq Dubai closed up 0.1%.