Global M&A Drops in Q3 As US-China Trade Turmoil Looms

Global mergers and acquisitions dropped to $783 billion in the third quarter, down 35 percent from the prior quarter, as the escalating trade dispute between the United States and China cast a shadow on the financial and regulatory prospects of some deals.

U.S. chip maker Qualcomm Inc pulled its planned $44 billion acquisition of NXP Semiconductors NV in July after China delayed offering antitrust clearance, a move seen as retaliatory to the trade tariffs announced by the United States.



This has cast uncertainty on the prospects of other deals involving global companies that require Chinese regulatory approval, including aerospace supplier United Technologies Corp’s $23 billion acquisition of Rockwell Collins Inc.

“We’ve got some clouds on the horizon, vis a vis a trade skirmish, or potentially a trade war with China. You have the potential for a hard Brexit and we’ve got rising rates,” said Mark Shafir, Citigroup Inc’s global co-head of M&A.

The number of global announced deals hit its lowest since 2013, at about 9,135, and global deal volume was down 6 percent compared with a year ago. To be sure, dealmaking activity has remained stronger than average and the first nine months of 2018 saw global M&A reach a new record of $3.2 trillion.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza