Greener pastures await M&A dealmakers despite the overhang of a restrictive regulatory environment, geopolitical turmoil and macro uncertainty, corporate dealmakers, private equity executives, economists and regulators told the audience during the Mizuho | Greenhill Dealmakers Forum on September 12, 2024, in New York.
Key factors driving a resurgence in M&A include lower interest rates, greater certainty post the U.S. election and the expectation for growth in the technology, pharma and infrastructure sectors, especially digital infrastructure, which will serve as a foundation across industries for decades to come. Industry veterans including IBM’s Alex Stern, Senior Vice President, Strategy and M&A, Jay Stamatis, Vice President and Head of Business Development & Acquisitions at AbbVie and Raj Rao, President & Chief Operating Officer at Global Infrastructure Partners each spoke about the opportunities in their industry, selection criteria and art of getting a deal across the finish line.
Maziar Minovi, CEO of Eurasia Group, noted that the world is in a “geopolitical recession” meaning that the global political architecture created after World War II is no longer applicable to the current world order. He called out potential “grey swans” ahead including a possible escalation of conflict between Russia and Ukraine, while also pointing out some bright spots. Those include the change in administration to a new Labour government in the UK, India’s growth and young demographics and the promise of AI to drive economic growth.
When asked about how politicians can work together across the aisle as a barometer for dealmaking, former U.S. Congressman Tim Ryan told forum members to find a “common cause” to bond over. The use of natural gas for power generation and working towards more efficient government were two effective examples he provided. Steve Ricchiuto, Mizuho’s Chief U.S. Economist, also painted an optimistic picture of the U.S. economy saying it was “healthy” and was the best place to “put money to work” though he cautioned a too-fast reduction in rates may re-accelerate inflation.
Yasuhiro Sakoh, Senior Vice President & General Manager, Mitsui & Co (U.S.A.) Inc., the storied Japanese trading house, provided his insights on how new sentiment and guidance of Japan’s Ministry Economic Trade and Industry (METI) have paved the way for foreign investment and cross-border deal flow.
A panel of experts discussed fending off activist investors while a group of Mizuho financiers considered how best to finance acquisitions amid a changing rate environment. Dealmakers also heard from Makan Delrahim, Partner, Latham & Watkins, and former Assistant Attorney General (DOJ) and Paul Rosen, Assistant Secretary of the Treasury for Investment Security and head of the Committee on Foreign Investment in the United States (CFIUS), who provided some clarity around the various agencies’ approach and review process.
The key take-away, after a banner 2021 and muted ’22 and ’23, is that dealmaking is revving its engine amid a more favorable economic backdrop and is poised to make a comeback as corporates look to scale businesses and private equity seek to put money to work, monetize assets and return investor capital.
