BREAKING|7398 views|Apr 3, 2020,08:33am EDT

M&A Activity Plunges, It Could Get

Much Worse As Coronavirus Hits
Markets And Prevents Face-To-Face
Meetings
Sergei KlebnikovForbes Staff
Markets
I cover breaking news, with a focus on money and markets.

Corporate deal-making has stalled as the impact from coronavirus

takes a toll on the global economy. ... [+]
TAYFUN COSKUN/ANADOLU AGENCY VIA GETTY IMAGES

Topline: With large parts of the world shut down due to the
coronavirus, global mergers and acquisitions have been put on pause
with companies being forced to abandon takeover deals as they
struggle with staying afloat and paying workers.

News peg: After almost half a year of tense and increasingly hostile
merger negotiations, Xerox walked away from its $35 billion bid of
rival printing company, HP, earlier this week saying it needs to instead
focus on the impact of the coronavirus outbreak on its business.

• As much of the global economy shuts down due to widespread

lockdowns and shelter-in-place orders, the M&A pipeline is
slowing: Companies are facing a lack of debt financing, wild
stock market swings and restricted face-to-face contact for
business deals—all making it harder to seal new transactions.

• According to analysis from Dealogic, the value of M&A activity in

the first quarter was significantly lower than the last quarter of
2019, down 35% globally and 39% in the U.S.
 • Just $618 billion worth of deals have been completed in 2020
compared with $956 billion by this time last year, according to
the data.

• The value of worldwide M&A activity fell 25% from last year,
totaling just $730.5 billion in the first quarter of 2020, according
to data from Refinitiv.

• In the U.S. the decline is even worse with a 50% year-over-year

decrease in overall M&A value: Dealmaking for U.S. targets
totaled just $256 billion during the recently ended quarter—
hitting a five-year low, Refinitiv says.

• Just four of the top 10 worldwide deals announced during the

quarter took place in the U.S., bringing America’s overall share of
global dealmaking to 35%, down from 52% a year ago—the
lowest level since 2012.
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Crucial statistic: It was the worst first quarter for M&A since 2016,
Refinitiv’s data shows, as the overall number of deals declined 13%
from a year ago and hit a six-year low.

Crucial quote: While dealmakers started the year with a very positive
outlook expecting increased activity in M&A deals, “that is now starting
to change,” says Cornelia Andersson, head of M&A and Capital Raising
for Refinitiv. “It’s likely that the impact of the coronavirus on M&A and
capital raising is a story of a delayed effect, where we’ll see activity
pushed back to the last two quarters of the year,” she predicts.
However, if the ongoing public health crisis worsens, “then it’s likely
that we will see a reduced volume of activity across the board.”