NEW YORK/LONDON: Global M&A activity tumbled to its lowest level in more than a decade in the second quarter, according to data provider Refinitiv, as companies gave up on expansion plans to focus on protecting their balance sheets and employees in the wake of the coronavirus outbreak.
Most of the decline was driven by the United States, where M&A plunged 85 per cent from year-earlier levels to US$94.3 billion as U.S. coronavirus cases surged. It marked the first time since the third quarter of 2009 that United States has not led the rankings. National Commercial Bank , Saudi Arabia’s biggest lender, said last week it would buy smaller lender Samba Financial Group for as much as US$15.6 billion.
"Doing cross-border deals requires a level of confidence and optimism that has taken a knock this year, especially when it comes to transactions across continents," said Nick O'Donnell, a partner at law firm Baker & McKenzie LLP. Last month, private equity firm Sycamore Partners ended its US$525 million deal to acquire lingerie brand Victoria's Secret from L Brands Inc, while Japanese tech conglomerate SoftBank Group Corp dropped its agreement to fund a US$3 billion tender offer for additional shares in co-working company WeWork.
"Many of our clients are starting to think big and outside of the box, asking themselves what has changed and how do I adjust my strategic priorities to reflect the pandemic we have all been living through."
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