By Jonathan Ntege Lubwama
- Last month corporate takeovers reached $139B in the U.S., the highest since June 2019
- Microsoft $69B takeover of Activision Blizzard contributed to nearly half of all deals
October witnessed a resurgence in U.S. corporate takeovers, with deals amounting to $139 billion, nearly triple the volume of the same period last year and the highest for a single month since June 2019. Microsoft (MSFT +1.29%) sealed one of the year’s biggest deals, acquiring video game behemoth Activision Blizzard for $69 billion. The oil and gas sector also saw a surge in deal activity, with Chevron (CVX -0.77%). buying Hess for $53 billion and ExxonMobil (XOM -1.22%) acquiring Pioneer Natural Resources for approximately $60 billion. This resurgence in U.S. corporate takeovers signals a robust M&A market, despite the global M&A slump.
Why This Matters: The surge in deals, particularly in the oil and gas sector, indicates a strategic move by companies to consolidate, cut costs, and boost production. Microsoft’s Activision Blizzard acquisition underscores the growing importance of the gaming industry. Collectively these flurry of deals suggest investors are optimistic about future M&A activity, with predictions of another burst in 2024. Optimism is further fueled by expectations of the U.S. Federal Reserve lowering interest rates in 2024.
Other notable deals included Bristol Myers Squibb’s agreement to purchase biotech firm Mirati Therapeutics for $5.8 billion and Prosperity Life affiliate USA Life Insurance’s acquisition of National Western Life for $1.9 billion. Additionally, independent oil and gas player Civitas Resources expanded its West Texas footprint with a $2.1 billion bid for Vencer Energy.
What’s Next: Looking ahead, the AlphaMarket Growth Summit predicts that about 1,200 private U.S. companies will run out of funds by the end of next year, potentially leading to a surge in capital-raising activities, either through public listings or acquisitions. Furthermore, the London Stock Exchange Group (LSEG)’s rankings of M&A legal advisers highlight U.S. dealmaking’s increasing share in global M&A, rising from 42% to 44% in the first nine months of 2023.
However, the global M&A market has seen a 27% drop in the total value of announced deals compared to the same period last year. As the M&A landscape continues to evolve, law firms like Kirkland & Ellis and Goodwin Procter, which topped LSEG’s principal adviser ranking, will play a crucial role in shaping the future of global dealmaking.
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