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'Unstoppable' global M&A faces slower 2020 on markets, politics – BNNBloomberg.ca

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The M&A train powered through instability this year, keeping a pace dealmakers worry won’t be maintained in 2020.

Global mergers and acquisitions weathered geopolitical tensions and roiling markets to post US$2.99 trillion in volume this year, a 1.5 per cent dip from 2018 though still the fifth-best year ever.

The number of deals this year through Friday dropped 4.2 per cent to 29,015, according to data compiled by Bloomberg. The biggest was United Technologies Corp.’s agreement in June to buy Raytheon Co., creating an aerospace and defense player worth more than US$100 billion.

“The current M&A market has proven to be unstoppable,” said Dusty Philip, Goldman Sachs Group Inc.’s co-head of global mergers and acquisitions. “Despite spikes in market volatility and macro concerns regarding trade and political uncertainty, we’ve seen a flurry of large scale M&A transactions in recent weeks.”

Backlog Grows

The bank’s “backlog is clearly up from the beginning of the year,” Philip said.

Goldman Sachs remained the top-ranked dealmaker in 2019, advising on 281 deals worth US$1 trillion, according to data compiled by Bloomberg.

JPMorgan Chase & Co., neck and neck with Morgan Stanley for the No. 2 slot, followed with 258 deals worth US$872 billion. Morgan Stanley advised on 233 deals worth US$813 billion.

While last year they were buoyed by a flush of private equity deals and transactions in the middle-market, this year was propped up by a rush of mega mergers. The top three investment banks were also helped as turmoil in Europe stung the region’s dealmakers.

Board rooms have plenty to worry about next year: the tumultuous U.S. presidential campaign, the U.K.’s Brexit deadlines, tariff-fueled trade tensions and regulatory regimes targeting the world’s largest companies.

Regulatory Issues

There will likely be fewer large deals in 2020, partly because of regulatory issues, said Robert Kindler, Morgan Stanley’s global head of mergers and acquisitions. Kindler expects the number of transactions to be comparable to this year, even as volumes shrink.

“I don’t expect that in anticipation of the election there will a rush to do deals out of concern with the possibility of a change in administration,” he said. “I don’t think there’s that much of a difference between the current administration and what some of the Democratic candidates are saying.”

Shareholder Paydays

Some deal drivers have not let up, such as shareholders pushing for buyout paydays over stock buybacks. As global economic activity grows more subdued, companies seeking growth are fighting over fewer desirable assets.

Private equity firms, flush with an estimated US$1.4 trillion in dry powder, are benefiting from cheap financing and finding partners to buy bigger targets. The largest this year was the US$14.3 billion buyout of fiber network company Zayo Group Holdings Inc. announced in May, in which Stockholm-based private equity firm EQT AB joined Digital Colony Partners.

Several private equity firms have been circling Germany’s Thyssenkrupp AG, which could fetch more than 15 billion euros (US$16.7 billion), people familiar with the matter have said.

Alison Harding-Jones, head of M&A for Europe, the Middle East and Africa at Citigroup Inc, expects a busy first half of the year.

“There’s support for strategic deals that are fairly priced — demand for high quality companies is strong across strategics and private equity,“ she said.

Health-Care Boom

Health-care M&A volumes hit an all-time high in 2019, reaching $461 billion. Mega deals included Bristol-Myers Squibb Co. buying Celgene Corp. and AbbVie Inc. acquiring Allergan Plc.

Christina Dix, Bank of America Corp.’s head of health-care banking for Europe, the Middle East and Africa, said pharmaceutical companies will focus on optimizing their portfolios amid drug pricing pressure and U.S. health-care reform.

‘Positive Conversations’

Jonathan Davis, an M&A partner at Kirkland & Ellis who advised AbbVie on the Allergan deal, said the deals pipeline is strong but he is watching whether companies show increased caution next year.

“There are a lot of positive conversations going on, but that is balanced by a few pronounced headwinds, including an upcoming election cycle and associated political and regulatory uncertainty, high valuations and recent choppiness in the credit markets.” Davis said.

To combat future market swings, companies are using stock to fund deals at the highest level in almost 20 years. Acquisitions by U.S. companies in which part of the payment is stock have surged 41 per cent to US$753 billion, higher than any previous full year since 2000.

Paying in stock, which ties a deal’s risk to the market, will remain a popular option to hard cash, said Anu Aiyengar, JPMorgan’s head of M&A for North America.

“When you have a large amount of uncertainty in the world,” she said, “one way to address that is to do stock for stock deals.”

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NDP and B.C. Conservatives locked in tight battle after rain-drenched election day

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VANCOUVER – Predictions of a close election were holding true in British Columbia on Saturday, with early returns showing the New Democrats and the B.C. Conservatives locked in a tight battle.

Both NDP Leader David Eby and Conservative Leader John Rustad retained their seats, while Green Leader Sonia Furstenau lost to the NDP’s Grace Lore after switching ridings to Victoria-Beacon Hill.

However, the Greens retained their place in the legislature after Rob Botterell won in Saanich North and the Islands, previously occupied by party colleague Adam Olsen, who did not seek re-election.

It was a rain-drenched election day in much of the province.

Voters braved high winds and torrential downpours brought by an atmospheric river weather system that forced closures of several polling stations due to power outages.

Residents faced a choice for the next government that would have seemed unthinkable just a few months ago, between the incumbent New Democrats led by Eby and Rustad’s B.C. Conservatives, who received less than two per cent of the vote last election

Among the winners were the NDP’s Housing Minister Ravi Kahlon in Delta North and Attorney General Niki Sharma in Vancouver-Hastings, as well as the Conservatives Bruce Banman in Abbotsford South and Brent Chapman in Surrey South.

Chapman had been heavily criticized during the campaign for an old social media post that called Palestinian children “inbred” and “time bombs.”

Results came in quickly, as promised by Elections BC, with electronic vote tabulation being used provincewide for the first time.

The election authority expected the count would be “substantially complete” by 9 p.m., one hour after the close of polls.

Six new seats have been added since the last provincial election, and to win a majority, a party must secure 47 seats in the 93-seat legislature.

There had already been a big turnout before election day on Saturday, with more than a million advance votes cast, representing more than 28 per cent of valid voters and smashing the previous record for early polling.

The wild weather on election day was appropriate for such a tumultuous campaign.

Once considered a fringe player in provincial politics, the B.C. Conservatives stand on the brink of forming government or becoming the official Opposition.

Rustad’s unlikely rise came after he was thrown out of the Opposition, then known as the BC Liberals, joined the Conservatives as leader, and steered them to a level of popularity that led to the collapse of his old party, now called BC United — all in just two years.

Rustad shared a photo on social media Saturday showing himself smiling and walking with his wife at a voting station, with a message saying, “This is the first time Kim and I have voted for the Conservative Party of BC!”

Eby, who voted earlier in the week, posted a message on social media Saturday telling voters to “grab an umbrella and stay safe.”

Two voting sites in Cariboo-Chilcotin in the B.C. Interior and one in Maple Ridge in the Lower Mainland were closed due to power cuts, Elections BC said, while several sites in Kamloops, Langley and Port Moody, as well as on Hornby, Denman and Mayne islands, were temporarily shut but reopened by mid-afternoon.

Some former BC United MLAs running as Independents were defeated, with Karin Kirkpatrick, Dan Davies, Coralee Oakes and Tom Shypitka all losing to Conservatives.

Kirkpatrick had said in a statement before the results came in that her campaign had been in touch with Elections BC about the risk of weather-related disruptions, and was told that voting tabulation machines have battery power for four hours in the event of an outage.

— With files from Brenna Owen

This report by The Canadian Press was first published Oct. 19, 2024.

The Canadian Press. All rights reserved.

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Breakingnews: B.C. Conservative Leader John Rustad elected in his riding

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VANDERHOOF, B.C. – British Columbia Conservative Leader John Rustad has been re-elected in his riding of Nechako Lakes.

Rustad was kicked out of the Opposition BC United Party for his support on social media of an outspoken climate change critic in 2022, and last year was acclaimed as the B.C. Conservative leader.

Buoyed by the BC United party suspending its campaign, and the popularity of Pierre Poilievre’s federal Conservatives, Rustad led his party into contention in the provincial election.

The Canadian Press. All rights reserved.

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Early tally neck and neck in rain-drenched British Columbia election

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VANCOUVER – Predictions of a close election were holding true in British Columbia on Saturday, with early returns showing the New Democrats and the B.C. Conservatives neck and neck.

Conservative Leader John Rustad was elected in Nechako Lakes, and 20 minutes after polls closed, his party was elected or leading in 46 ridings, with the NDP elected or leading in 45.

Among the early winners were the NDP’s Ravi Kahlon in Delta North and Niki Sharma in Vancouver-Hastings, as well as the Conservatives’ Bruce Banman in Abbotsford South.

It was a rain-drenched election day in much of the province.

Voters braved high winds and torrential downpours brought by an atmospheric river weather system that forced closures of several polling stations due to power outages.

Residents faced a choice for the next government that would have seemed unthinkable just a few months ago, between the incumbent New Democrats led by David Eby and Rustad’s B.C. Conservatives, who received less than two per cent of the vote last election

Green Leader Sonia Furstenau has acknowledged her party won’t win, but she’s hoping to retain a presence in the legislature, where the party currently has two members.

Elections BC has said results are expected quickly, with electronic vote tabulation being used provincewide for the first time.

The election authority expected most votes to be counted by about 8:30 p.m., and that the count would be “substantially complete” within another half-hour.

Six new seats have been added since the last provincial election, and to win a majority, a party must secure 47 seats in the 93-seat legislature.

There had already been a big turnout before election day on Saturday, with more than a million advance votes cast, representing more than 28 per cent of valid voters and smashing the previous record for early polling.

The wild weather on election day was appropriate for such a tumultuous campaign.

Once considered a fringe player in provincial politics, the B.C. Conservatives stand on the brink of forming government or becoming the official Opposition.

Rustad’s unlikely rise came after he was thrown out of the Opposition, then known as the BC Liberals, joined the Conservatives as leader, and steered them to a level of popularity that led to the collapse of his old party, now called BC United — all in just two years.

Rustad shared a photo on social media Saturday showing himself smiling and walking with his wife at a voting station, with a message saying, “This is the first time Kim and I have voted for the Conservative Party of BC!”

Eby, who voted earlier in the week, posted a message on social media Saturday telling voters to “grab an umbrella and stay safe.”

Two voting sites in Cariboo-Chilcotin in the B.C. Interior and one in Maple Ridge in the Lower Mainland were closed due to power cuts, Elections BC said, while several sites in Kamloops, Langley and Port Moody, as well as on Hornby, Denman and Mayne islands, were temporarily shut but reopened by mid-afternoon.

Karin Kirkpatrick, who is running for re-election as an Independent in West Vancouver-Capilano, said in a statement that her campaign had been in touch with Elections BC about the risk of weather-related disruptions, and was told that voting tabulation machines have battery power for four hours in the event of an outage.

West Vancouver was one of the hardest hit areas for flooding, and Kirkpatrick later said on social media that her campaign had been told that voters who couldn’t get to a location to cast their ballot because of the extreme weather could vote through Elections BC by phone.

— With files from Brenna Owen

This report by The Canadian Press was first published Oct. 19, 2024.

The Canadian Press. All rights reserved.

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