Despite all of the merging in the financial commmunity, 2008 actually has been a bust year for M&A activity.
This year saw 1,309 transactions worth $911 billion abandoned compared to 870 wihdrawn in 2007 worth $1 trillion. The biggest withdrawn deal of 2008 was NHP Billiton’s $147 billion offer for Rio Tinto. In Canada, BCE came up No. 2 after withdrawing its $48 billion takeover by a group of private equity firms. No. 3, of course, was the failed takeover of Yahoo for $47 billion.
Factors making deals go bad include a lack of credit, falling earnings and market volatility.
Top advisers for M&A were, in order, JPMorgan, Goldman Sachs, Citigroup and Merrill Lynch.
Speaking of Merrill, one might get the idea that there was a lot more activity since the venerable investment house is being taken over by Bank of America. Other marque name bank takeovers include Wells Fargo of Wachovia and PNC of National City.
It’s hard to say if things will improve in 2009 but it seems likely that stock swaps will trump cash deals.
Why? Not many firms have a lot of cash.
