Dealmakers Stay Busy Amid Record M&A Activity This Holiday Season

A surge in mergers and acquisitions has led investment bankers and advisers to forego traditional holiday breaks as they work on a record-setting number of deals. As of December 22, 2023, there have been $463.6 billion in M&A transactions announced this month, marking a 30 percent increase compared to the same period last year. Prominent deals include the $6 billion merger between Trump Media & Technology Group and nuclear fusion firm TAE Technologies, as well as IBM’s $11 billion acquisition of data infrastructure company Confluent.

Intense Bidding for Warner Bros Discovery

The holiday season is proving to be particularly active, with notable attention on the ongoing bidding war for Warner Bros Discovery. Investment bankers at Citigroup reported that November was the busiest month in years, and dealmakers from major financial hubs like New York, London, and Hong Kong are racing to finalize numerous multi-billion-dollar transactions before the New Year.

Charles Ruck, a partner at Latham & Watkins, which is advising Paramount on its bid for Warner Bros, expressed enthusiasm about the current climate. “This is the hunt and the finish, and we all enjoy it,” he stated. Ruck noted that while he encourages colleagues to travel, he also emphasizes the need for availability, saying, “I might need some of your time.”

Recently, a consortium of private equity firms led by Permira and Warburg Pincus signed a deal to acquire Clearwater Analytics Holdings for approximately $8.4 billion, including debt. John Collins, global head of M&A at Morgan Stanley, remarked, “It’s busy, and it’s really broad-based… we’re seeing a fair amount of activity across most of our industry sectors.”

Outlook for 2024 and Beyond

As the end of the year approaches, many companies are looking to hire advisers to strategize for significant transactions anticipated in 2026. Some dealmakers are committed to working through the holidays, with hopes of taking off Christmas Day, and possibly Christmas Eve. However, those involved in the Warner Bros deal are likely to remain tethered to their devices, as Paramount has recently amended its $108.4 billion hostile bid, extending the deadline to January 21, 2024. RedBird Capital Partners is co-financing this revised offer, and its founder, Gerry Cardinale, confirmed on CNBC, “We’re going to be working through the holidays and into the first week of January.”

Expectations remain high for additional deals, with Ruck indicating that Latham & Watkins anticipates announcing at least four more transactions in the coming weeks. He remarked, “Our team understands it without me saying it. They recognize that this is a magic moment.”

This year has been remarkable for dealmakers, especially following a slowdown caused by a trade war initiated by former U.S. President Donald Trump in mid-2022. As of now, global M&A activity has topped $4.8 trillion, positioning 2023 as the second-best year on record for mergers and acquisitions, trailing only behind 2021 when the total surpassed $6 trillion due to low interest rates and COVID-19 stimulus measures.

Looking ahead, Frank Aquila, a partner at Sullivan & Cromwell, anticipates a robust pipeline for the first half of 2024, potentially rivaling the activity seen in 2021. “This will very much be a working holiday,” he stated. Guillermo Baygual, global co-head of M&A at Citigroup, echoed this sentiment, noting that his team is “extremely busy” with significant transactions across various sectors. Collins added that there has been a notable shift in corporate philosophy, with management teams now actively seeking reasons to say yes to deals.

As the M&A landscape continues to evolve, the dedication of those in the industry during this festive season highlights the ongoing demand for strategic growth and expansion in an increasingly competitive market.