The end of October 2022 has been a whirlwind for mergers and acquisitions. But that’s really no surprise considering the erratic status of the economy.
From increasing global mergers and acquisitions to Goldman Sachs appointing new M&A co-heads, Alex Fopiano of Massachusetts reports that there’s a lot to catch up on as November begins.
The US Dollar Is Set to Increase Worldwide Mergers and Acquisitions
Reports state the relative strength of the United States dollar is projected to continue as the Federal Reserve strikes to tackle inflation by restricting monetary policy.
The strength has caused US multinational corporations major headaches, as the money they make overseas is worth less following conversion.
However, this relationship has created interesting opportunities for US companies looking to acquire businesses — those abroad are wonderfully cheap.
The dollar has risen:
- 20% against the British pound
- 16% against the euro; and
- Almost 30% against the Japanese yen
So, acquisitions in these markets are unexpectedly discounted in the latter half of this year.
Simon & Schuster Acquisition Falls Through Thanks to The Court
Bertelsmann/Penguin Random House attempted to acquire Simon & Schuster for $2.175 billion, but Judge Florence Pan blocked the acquisition.
However, this didn’t come as a shock to those in the American publishing industry. Since the August trial, they’ve expected Judge Florence Pan’s decision since they believed the proposed merger to be ill-defended.
Simon & Schuster, the 98-year-old revered publishing house, is deeply honored within the community. Thus, the situation has left a great deal of consternation surrounding its fate.
When Judge Pan wrote the (decidedly brief) order, she stated that the proposed merger might be mainly to reduce competition in the market for US publishing rights to anticipated bestsellers. Therefore, she ruled in favor of the plaintiff and voided any possibility of the acquisition.
To follow on from Judge Pan’s verdict, Jonathan Kanter, the assistant attorney general, stated the merger would’ve decreased competition, lowered author compensation, and reduced the diversity, breadth, and depth of the country’s stories.
Goldman Sachs Appoints New M&A Co-Heads
Several weeks after Goldman Sachs Chief Executive David Solomon revealed a massive transformation of the Wall Street bank’s ranks, Goldman Sachs appointed two bankers to head its mergers and acquisitions team in the Americas.
The bank elevated Brian Haufrect and Avinash Mehrotra, two company veterans, to the brand-new co-heads of the Americas M&A, as per a memo seen by Reuters and confirmation from a Goldman spokesperson.
Currently, Mehrotra is the head of global activism and takeover defense, while Haufrect is the global head of natural resources M&A. And it appears they will both continue holding these positions while taking on co-head responsibilities.
The decision to appoint them came after the bank combined their investment banking and trading into one department and merged asset management and wealth management.
The shake-up of the bank’s departments seems to come at a good time, as worldwide mergers and acquisitions are set to increase.