Large M&A picks up in Q3; US bankruptcies rise; global VC investments tumble
Sarah Cottle
Growth-Focused Executive | GM | Driving Profitability & Operational Excellence in B2B Data, Research, Advisory | M&A Integration | Governance | Digital Transformation | Trusted C-Suite Advisor | Board Member
In this edition of?Insight Weekly, we put the spotlight on the M&A market. Four global $10 billion-plus M&A deals with an aggregate value of $73.42 billion were announced in the third quarter, up from the year-ago total of two deals worth a combined $33.50 billion, according to S&P Global Market Intelligence data. Two transactions in September boosted third-quarter activity — Cisco Systems Inc.'s $29.41 billion deal for Splunk Inc. and Smurfit Kappa Group PLC's $20.97 billion deal for WestRock Co. Those deals were the largest global M&A announcements since May. Still, 2023 is on pace to record a dropoff in large M&A activity overall. The slowdown in large M&A deals has been driven by higher interest rates, which raise the cost of deal financing. In the US banking sector, a total of 34 deals were announced in the third quarter, beating the first- and second-quarter totals of 20 and 25, respectively. The aggregate deal value surged to $2.76 billion in the third quarter, compared to the first and second quarter's combined aggregate deal value of $629.9 million.
Market Intelligence recorded 62 US corporate bankruptcy filings in September, bringing the third quarter's total to 182. Healthcare saw the most bankruptcies for a second consecutive month, bumping the sector into second place on total year-to-date filings for 2023.The consumer discretionary sector recorded an additional seven bankruptcies, while six industrial companies sought bankruptcy protection. California and Texas each added five bankruptcies, bringing their totals to 1,200 and 978 filed since 2010, respectively.
The value of venture capital investments worldwide dropped 30% in the third quarter to $56.93 billion, while the number of funding rounds declined 34.9% to 3,323, Market Intelligence data shows. Companies in the Asia-Pacific region had five of the 10 largest funding rounds in the quarter. The technology, media and telecommunications sector dominated global venture capital investments in the quarter, attracting 35.5% of the total value.
M&A Deals in Focus
Large global M&A deals pick up YOY in Q3
The third quarter finished with four global $10 billion-plus M&A deal announcements, up from two in the year-ago period, and they had a total value of $73.42 billion, more than double the year-ago total of $33.50 billion.
—Read more on S&P Global Market Intelligence.
Bank M&A 2023 Deal Tracker: 7 deals announced in September
Seven US bank deals were announced in September, bringing the year-to-date total to 79. That is down from 122 deals in the first three quarters of 2022.
—Read more on S&P Global Market Intelligence.
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Deep Dives
In-depth features looking at the impact of major news developments in key industries.
Financials
Deposit price sensitivity tops earlier cycles, keeping pressure on margins
The industrywide deposit beta, or the change in deposit costs relative to underlying rates, is now higher than the previous two rate-increasing cycles.
—Read more on S&P Global Market Intelligence.
European banks' capital offerings up year on year in Q3
European banks raised €56.53 billion in the third quarter, an increase of more than €6 billion compared to last year.
—Read more on S&P Global Market Intelligence.
Most major Asia-Pacific banks further build capital buffers in Q2
Strong capital buffers will likely cushion mainland Chinese banks from the drag in the property sector, even as some banks reported a decline in capital ratios that likely stemmed from a write-off of bad mortgages.
—Read more on S&P Global Market Intelligence. ?
Financials Research: Higher-for-longer rates mean lingering pain from bond portfolios
While some banks could restructure their bond portfolios, many more will continue to battle the drag from underwater securities and the related pressure on net interest margins and liquidity assessments during regulatory exams.
—Read more on S&P Global Market Intelligence.
Insurance
Bulk of major US insurers experience market cap bump in Q3
The S&P 500 Insurance Index outperformed the broader market and finished the third quarter up 3.4%.
—Read more on S&P Global Market Intelligence. ?
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Fintech
Banks, credit unions testing AI models for underwriting in credit cycle
The digital banking evolution has incubated data-driven AI models for credit underwriting in the past decade. With the odds rising for credit deterioration, some early adopters are gearing up for running the models in a downturn for the first time.
—Read more on S&P Global Market Intelligence. ?
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Real Estate
Manageable debt, quality assets cushion US public office REITs against headwinds
Public office real estate investment trusts had total debt of $81.69 billion as of the end of the second quarter, 87.8% of which have a fixed rate, according to S&P Global Market Intelligence data.
—Read more on S&P Global Market Intelligence.
Private Equity
Global venture capital investments tumble in Q3
The value of global venture capital investments in the third quarter declined to $56.93 billion from $64.82 billion in the second quarter.
—Read more on S&P Global Market Intelligence.
Credit and Markets
US corporate bankruptcies pick up speed in September with 62 new filings
The third quarter recorded the highest number of bankruptcies thus far in 2023.
—Read more on S&P Global Market Intelligence.
With US job market imbalanced, labor strikes surge to highest level since 2000
As unemployment remains below 4% in the US, workers use leverage for higher pay.
—Read more on S&P Global Market Intelligence.
Renewed fall in global demand fueled by rising impact of higher interest rates
The growing signs of weakness in interest-rate sensitive sectors has accompanied a spreading manufacturing malaise.
—Read more on S&P Global Market Intelligence.
Consumer discretionary tops US public sector risk analysis in Q3 2023
The sector continues to draw short sellers, and a spate of companies in the space revised their corporate guidance downward in the third quarter.
—Read more on S&P Global Market Intelligence. ?
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Energy and Utilities
Merchant developers fill 'void' in US interregional grid build-out
Private companies are playing a major role in adding new interregional transmission lines, an in-depth assessment found. But experts said more needs to be done to remove barriers to high-voltage direct-current power lines developed by nonutilities.
—Read more on S&P Global Market Intelligence.
More utilities shed value in Q3; Constellation bucks trend
The dismal performance of utility stocks continued through the third quarter of 2023, dragging down the market capitalization of the biggest names in the sector.
—Read more on S&P Global Market Intelligence. ?
RRA Research: US energy utilities seek almost $24B in pending rate cases
There were 116 electric, gas and steam proceedings pending across the US for the investor-owned utilities in Regulatory Research Associates' coverage universe.
—Read more on S&P Global Market Intelligence.
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Technology, Media and Telecommunications
451 Research: Metaverse Digest: The latest global, enterprise and industrial developments
From Toy Story NFL and Chinese industrial strategy to Roblox’s economic model and yet more generative AI applications, the evolution of the metaverse continues. The breadth of recent developments spans the industrial and enterprise sectors.
—Read more on S&P Global Market Intelligence.?
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Metals and Mining
Metals and Mining Research: Consensus price forecasts – Outlook dampened by Fed's hawkish tone
Near-term demand challenges and the US Federal Reserve's hawkish pivot stalled the metals price rally in September as higher energy prices lifted US inflation.
—Read more on S&P Global Market Intelligence. ?
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Supply Chain
Trade conditions continue to deteriorate at end of Q3
The worldwide Purchasing Managers' Index (PMI) surveys compiled by S&P Global Market Intelligence indicated a 19th successive monthly deterioration in global trade in September, albeit at a slightly more modest pace than seen in July and August.
—Read more on S&P Global Market Intelligence.
Festive reshoring: Holiday decoration supply chains shift
The value of imports — including maritime shipments only for August and September — in the four months to Sept. 30, 2023, are down by 14% year over year yet still 5% above the 2019 level.
—Read more on S&P Global Market Intelligence. ?
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ESG
Sustainability at sea: Port performance and emissions
Organizations like the International Maritime Organization, the United Nations, and the European Commission put international shipping at somewhere between 2% and 3% of global CO2 emissions.
—Read more on S&P Global Market Intelligence.
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The Week in M&A
European bank M&A tracker: Nordea-Danske deal leads Q3 activity
Read more on S&P Global Market Intelligence. ?
Analysts think Chevron could be next in line for big Permian deal
Read more on S&P Global Market Intelligence. ?
$1.98B deal to nearly double size of PE-backed acquirer's US life group
Read more on S&P Global Market Intelligence.
Avantax accepted Cetera's bid after deal talks with several parties failed
Read more on S&P Global Market Intelligence. ??
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The Big Number
Read more on S&P Global Market Intelligence.
Trending
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Director of Industry Research @ Industry Knowledge Graph LLC | MBA Visit IndustryKG.com
1 年In thinking about large company M&A activity, a hidden source of expense reduction will come from the growing use of semantics (ontology, W3C industry standards) that will drive much faster and cheaper system and data integration costs.