Since the start of June, mergers and acquisitions totaling more than $150 billion have either been postponed or canceled as financing becomes scarce.
That’s according to a report Friday (Aug. 26) by Bloomberg News, citing its own data. Among the scrapped deals was one announced Friday by KKR & Co., which said it was stepping away from plans to purchase Australia’s Ramsay Health Care for $14 billion.
Also this week, Swiss drugmaker Novartis AG said it was spinning off its $25 billion generics unit not finding compelling private equity bids, Bloomberg said.
Another drug company, Merck, has seen its talks to purchase the cancer drug maker Seagen Inc. held up over price concerns. And Ardian SAS is rethinking a $3 billion sale of Italian healthcare software company Dedalus, the report said.
Lars Aagaard, head of Asia Pacific M&A at Barclays Plc., told Bloomberg that rising interest rates and dislocated financing markets have made acquisition funding more costly and more difficult to raise.
“More deals are being pulled and auction processes put on hold,” Aagaard said. “Vendors’ price expectations take some time to adjust to the new normal.”
PYMNTS noted earlier this month that this phenomenon has extended to the crypto industry, where a series of long-planned mergers and SPAC acquisitions have fallen apart this summer.
The news isn’t surprising considering the bleak state of the crypto market. Bitcoin, the largest cryptocurrency, fell below the “psychologically vital” $20,000 mark this summer, a development that scared investors.
Beyond that, the firms that have gone public saw dramatically worsening results in the second quarter, with the highest profile crypto firm, Coinbase Global — which chose a SPAC merger over a direct Nasdaq listing — seeing its stock price demolished, falling 64% in the second quarter alone, as trading activity stumbled, and it posted losses of $1.1 billion.