Regulators Turn Focus To Mergers & Acquisitions Mega Deals

Regulators Turn Focus To Mergers & Acquisitions Mega Deals by Bryan Adams, FactSet

Recently US regulators have forced a re-assessment of two major mergers & acquisitions deals: Pfizer’s $194 billion combination with Allergan and Halliburton’s $39 billion takeover of Baker Hughes. Rumors of potential action from the US Treasury and the Department of Justice (DoJ) surfaced in the media on April 4, and almost immediately the arbitrage spreads for these deals felt the impact as traders’ confidence in the deals being completed quickly waned. Typically the target’s share price and the deal’s offer price converge and the spread moves to 0% as deals inch closer to completion and the risk of cancellation is reduced; clearing regulatory hurdles also...