Executive Briefings

M&A Activity Expected to Face Tough Going in 2009

If the last few days of 2008 are a sign of things to come, the prospects for mergers and acquisitions in the new year are certainly bleak. The latest evidence is the trouble facing Dow Chemical's proposed $15.3bn acquisition of rival Rohm & Haas. The deal was put in doubt Dec. 29 after the Kuwait government canceled a joint venture with Dow that would have indirectly provided key financing for the buyout. The Rohm & Haas deal could be saved or renegotiated, but if it's canceled it would hardly be a rarity in such a troubled climate for mergers and acquisitions. According to preliminary data from Dealogic, 1,309 M&A deals, totaling $911bn, were scrapped in 2008. Deal volume in the U.S. is off 29 percent from 2007, but M&A activity has all but halted more recently.
Source: Business Week

If the last few days of 2008 are a sign of things to come, the prospects for mergers and acquisitions in the new year are certainly bleak. The latest evidence is the trouble facing Dow Chemical's proposed $15.3bn acquisition of rival Rohm & Haas. The deal was put in doubt Dec. 29 after the Kuwait government canceled a joint venture with Dow that would have indirectly provided key financing for the buyout. The Rohm & Haas deal could be saved or renegotiated, but if it's canceled it would hardly be a rarity in such a troubled climate for mergers and acquisitions. According to preliminary data from Dealogic, 1,309 M&A deals, totaling $911bn, were scrapped in 2008. Deal volume in the U.S. is off 29 percent from 2007, but M&A activity has all but halted more recently.
Source: Business Week