With the current economic turmoil and countries focusing on rebuilding or fortifying, The Deal's Matt Miller asked at The Deal's M&A Outlook 2009 conference whether this is the end of cross-border deals.
Steven Baronoff, managing director and head of global M&A at Merrill Lynch & Co., noted that "CEO confidence can be the kryptonite or driving force behind M&A, and with today's markets, we'll see some pausing in deals." He continued: "Their expectations are very high. We saw inflated stock prices, and the recent downturn has hurt that." Dealmakers will adjust, he said, doing stock-for-stock deals.
Paul Beecy (pictured), a partner at Grant Thornton LLP, agreed. He said, "In our practice we're seeing a slower stream of deals. They're smaller and more strategic. No big gambles."
Nick Rees, co-managing partner of corporate and M&A, at Linklaters LLP, opined that we haven't seen the end of globalization but it is slowing. The liquidity crunch has led to an increase in protectionism. Second, look at Europe -- France may set up a sovereign wealth fund to keep domestic companies out of foreign hands. Third, of course, banks are less willing to lend.
Everyone agreed, though, globalization isn't over; there are just some hurdles (some of them very large) to get over. -
Baz Hiralal
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