Investment bankers see dealmaking lull storing pent-up demand

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Some of the world's top investment bankers said on Wednesday that a drop in corporate dealmaking in 2023 sets the stage for a pick-up in activity once...

A man is seen silhouetted wearing a protective face mask, amid the coronavirus disease pandemic, walking near the financial district of New York CityNEW YORK - Some of the world's top investment bankers said on Wednesday that a drop in corporate dealmaking in 2023 sets the stage for a pick-up in activity once uncertainty around the global economy, geopolitical conflicts and regulatory hurdles subsides.

Uncertainty over the Federal Reserve raising interest rates further to fight inflation, the conflicts in the Middle East and Ukraine, concerns about a potential economic slowdown and growing hostility among antitrust regulators to big deals have all weighed on the M&A market. JPMorgan Chase & Co global M&A head Anu Aiyengar pointed out these two deals were all-stock and said more companies are using their shares as currency to overcome acquisition targets' concerns about locking in a cheap valuation, which they would risk if they sold for cash.

"Complexity creates opportunity. If you are a corporation or a private equity firm that can put together a structure that bridges the gap on valuation, you will be able to get support from your financing partners," Katz said.

 

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