News Digest: US M&A markets slide as LBOs contract further
October 14, 2022
Mergers and acquisitions in the United States are set to decline for a sixth straight quarter as the outlook for deal financing darkened further. A key factor was the shriveling of leveraged buyout options (LBOs) as banks stayed away from committing funds to such initiatives.
A Bloomberg report listed deals worth around $212 billion over the past three months, making it the smallest since the second quarter of 2020. Several transactions that investors were betting on didn’t fructify, though Elon Musk’s proposal to buy Twitter for the original offer price did give a jolt to the M&A market.
The slump in both stock and bond markets fuelled by the Fed’s monetary tightening has led to a 31% decline in US deals during 2022. Their total worth was around $970 billion, but represented a 31% slump from the pace set in 2021.