Wall Street’s Deal Machine Accelerating

by Warren Seah

Wall Street’s deal-making activity is gaining momentum, as the dollar value of mergers and acquisitions announced in the U.S. this year has more than doubled compared to the same period last year.

Major Transactions

The largest deal of the year, totaling $35 billion, was revealed on Tuesday: the merger between Capital One Financial Corp. and Discover Financial Services. Additionally, Truist Financial announced the sale of its insurance brokerage to Stone Point Capital and Clayton Dubilier & Rice, while Walmart made a move to acquire smart-TV maker Vizio Holding.

Impressive Figures

According to Dealogic, there have been $289.9 billion worth of announced U.S. M&A deals in 1,051 transactions so far this year. In comparison, last year saw $125.6 billion in dollar volume from 1,821 deals during the same period.

Global Trends

Globally, there has been a surge in deal activity with $455.2 billion worth of deals announced this year, marking a 57% increase from the previous year.

On the Path to Recovery

While Wall Street is leaving behind two years of subdued deal activity, it has yet to return to the peak levels seen during the post-pandemic era. At this point in 2021, there were 2,153 U.S. deals announced, totaling $312 billion. Globally during the same period, there were 7,044 deals with a combined value of $636 billion, as reported by Dealogic.

Major Deals Shaping 2024

Synopsis Acquires Ansys for $35 Billion

One of the largest transactions in 2024 was Synopsis’ acquisition of software company Ansys for a staggering $35 billion.

Diamondback Energy Targets Endeavor Energy Resources with $25.8 Billion Offer

In another significant move, Diamondback Energy put forward a $25.8 billion proposal to acquire Endeavor Energy Resources.

Antitrust Concerns Loom Over Capital One’s Bid for Discover

Speculation arose among analysts about possible antitrust challenges for Capital One’s attempt to purchase Discover. With the Biden administration focused on preventing monopolies and protecting consumer interests, regulators may scrutinize this potential merger closely.

Regulatory Scrutiny Surrounding Kroger’s Purchase of Albertsons

The Federal Trade Commission, along with various states, might take legal action against Kroger’s $24.6 billion bid to acquire Albertsons as early as next week. An agreement preventing the deal’s closure is set to expire soon, raising concerns among industry insiders.

Competitive Advantages and Antitrust Mitigation

Kroger and Albertsons aim to enhance their competitive edge against giants like Amazon.com and Walmart by joining forces. Their strategy includes selling 413 stores to C&S Wholesale Grocers to address antitrust issues.

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