REFILE- Spiked M&A deals set for record as regulators increase scrutiny

Fri Sep 16, 2016 11:13am EDT
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(Refiling for wider distribution)

By Philip Scipio and Shankar Ramakrishnan

NEW YORK, Sept 16 (IFR) - Bayer will be hoping that its US$66bn purchase of Monsanto won't succumb to the same failure that has tripped up many other mergers and acquisitions this year, as regulators across the globe increase the scrutiny of deals.

The value of broken M&A transactions has spiked to US$682bn so far this year and is on track to break the record set in 2007 when deals valued at US$923bn fell apart, according to Thomson Reuters.

The number of deals that have collapsed this year stands at 708 through to September 15, outpacing each of the last five years and rivalling the period between 2008 and 2010 when financing markets seized up.

Bernstein Research analysts put the likelihood of the Bayer deal clearing regulatory hurdles at only 50%. Others are even less optimistic as US legislators set up a hearing to dissect the deal. Banks fear the hearings are designed to send a message to regulators to block the transaction.

"The increased politicization of M&A activity - and the fact that this activity has become a hot topic in Congress and campaign trails in more recent times - has to seep into minds of regulators while they look at these transactions," said the head of M&A at a European bank.

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