M&A is in a precarious place these days. According to Thomson Financial, there were fewer worldwide mergers in January 2008 than during any month in the last three years, comprising the lowest dollar volume in any month since November 2004. Private equity-backed M&A plummeted from 19.2 percent of deals in 2007 to only 7.9 percent in January 2008, and takeovers are being scuttled on a regular basis (including withdrawn offers of $9 billion for Australia’s Orica, and $4 billion for Belgian merchant bank NIB Capital NV).
Business confidence and the sub-prime mortgage crisis may be playing a role, but so are a number of other under-the-radar issues, which are explored in this month’s edition. Note our cover story, which explores how poor risk management in the past has contributed to a poor M&A climate in the present. Further inside, you’ll find another story about new accounting rules that are sure to make M&A deals more uncomfortable for those involved.
