Has the M&A Market Hit Bottom?

October 29, 2007, 3:52 pm
Posted by Dana Cimilluca, DealJournal - WSJ.com

M&A bankers can start crawling out from under their rocks.
The credit squeeze this summer put the M&A market in a deep freeze, and sent bankers running for cover. The volume of announced U.S. deals plummeted to $53.7 billion in September, according to data compiled by Thomson Financial. That is down nearly 80% from the $250.8 billion of deals struck at the height of the deal boom in May, courtesy of a leveraged-buyout surge fueled by the cheap credit then coursing through the veins of world financial markets.
With October ending in two days and the books closed on the final Merger Monday of the month today, it looks as if a rebound could be underway. In October, U.S. companies have struck $73.6 billion of takeovers, up 37% from last month, according to Thomson.
World-wide, a similar uptick is observed. After plunging 65% to $197.8 billion in September from May, global M&A volume has ticked up to $263 billion this month, the data show.
Caveats and caution flags abound. For one, the totals include Oracle’s $6.3 billion bid for BEA Systems this month. The offer has been rebuffed and may ultimately come to naught. And with jitters in the credit markets persisting, the jury is still out on whether we are in a temporary thaw before an even deeper deal freeze.
Still, should the upticks turn into a trend, bankers may come to remember this October more fondly than anyone outside of Red Sox fans.