The year (and year ahead) in deals
By most measures, 2024 was a year of fits and starts for M.&A., especially compared with a year ago. And I.P.O.s were a flat-out dud.
For deal makers, there are plenty of reasons to hope that 2025 will be better, including a potentially more business-friendly White House and Congress, investor ebullience and a relatively strong American economy. But there are also factors that may keep corporate deal makers on edge.
The year was mixed for deal making. Heading into 2024, bankers and lawyers said that the overall mood in corporate boardrooms was cautious, given geopolitical uncertainties and questions about the vitality of the global economy.
Deal activity ultimately reflected that. While the dollar volume of deals announced in 2024 as of Friday rose 9 percent year-on-year, to $3 trillion, the number of transactions fell 18 percent, to 46,534, according to data from the London Stock Exchange Group. That’s the lowest level since 2015 and worse than 2020, which was afflicted by the coronavirus pandemic.
While a handful of large corporate buyers were willing to take a chance on M.&A., would-be acquirers more broadly were feeling cautious. The biggest takeover bids announced in 2024 included:
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Alimentation Couche-Tard’s $58 billion offer for Seven & i Holdings, the Japanese operator of the 7-Eleven chain;
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Capital One’s $35 billion deal to buy Discover Financial Services;
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Mars’s roughly $36 billion acquisition of Kellanova, the Pop-Tarts maker.
(A potential point of comfort is that the biggest transactions covered a broad area of industries, including retail, financial services and technology.)
Among advisers, the usual suspects — Goldman Sachs, Morgan Stanley and JPMorgan Chase — claimed the biggest share of M.&A. activity, collectively participating in nearly $2.3 trillion worth of transactions. A resurgence in investment banking helped push shares in all three to record levels this fall. And Evercore, an independent investment bank, beat out bigger rivals like Barclays and UBS with $266.5 billion worth of advisory assignments.
Despite a bull market for the S&P 500, 2024 was a year to forget for I.P.O.s. Some 1,167 companies went public in the year, raising $110.6 billion. That’s down about 9.5 percent by number and 1.6 percent by fund-raising volume.
While some issuers were willing to brave sometimes choppy markets — top-performing I.P.O.s included those of Lineage, a real estate investment trust, and Reddit, the social media company — investor caution prompted many would-be market debutantes to wait.
Things are already looking up for 2025. Interest rates have come down in the United States and other major markets, as central banks take stock of relatively favorable declines in inflation. That has lowered the cost of financing, an especially important consideration for private equity firms.
By far the most significant reason for hope, deal makers say, is Donald Trump’s election victory and the likely return of deregulation. The president-elect has managed to reassure corporate leaders and their advisers that he will probably go easier on M.&A. than the Biden administration, notably with his picks of Gail Slater to lead the Justice Department’s antitrust division and Andrew Ferguson to head the Federal Trade Commission.
And for I.P.O.s, there’s a backlog of prominent names that could list in 2025, including Shein, the fast-fashion giant, and Klarna, the payment processor. Private equity and venture capital firms have been closely watching for signs of an I.P.O. comeback as a way to finally cash out on long-held investments.
But there are also areas of concern. Corporate leaders have been anxious about whether Trump will follow through on his threats to impose wide-ranging tariffs, which could drastically raise prices and lead to global trade battles even with close allies.
And then there is the prospect of chaos in Washington, despite Republicans set to regain control of both the White House and Congress. The fierce warfare over federal government funding, and some Republicans’ willingness to buck Trump (and Elon Musk, his influential adviser) on key priorities like raising the debt ceiling are reintroducing the No. 1 thing that worries the C-suite: uncertainty.
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