The next trade-war casualty may be the M&A market

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'If the big deals start to taper off and you don't get a pick-up in the sweet spot, then I think the second half of the year could be more problematic.'

Whether it's the sale of a Boeing jetliner or a tech takeover, trade tensions spell bad news for megadeals.Despite a steady flow of large mergers, global dealmaking is down 16 per cent overall. The trade war could complicate giant M&A deals, the kind that have kept the market together even as other types of dealmaking have slowed.

But the Boeing matter draws attention to an even a bigger risk: namely, that the trade war could complicate giant M&A deals, the kind that have kept the market together even as other types of dealmaking have slowed. The trend is even more pronounced when looking at combinations involving only US companies. Despite a steady flow of large mergers, global dealmaking is down 16 per cent overall.That's because transactions in the US$1 billion to US$5 billion range - typically considered the bread and butter of the M&A market - have slowed significantly in every region.

"If the big deals start to taper off and you don't get a pick-up in the sweet spot , then I think the second half of the year could be more problematic," Mark Shafir, co-head of global M&A at Citigroup Inc, said at the Bloomberg Invest New York conference on Wednesday.As companies study their supply chains,"it's starting to become a confidence issue", he said.

 

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