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2016 Was a Rough Year for Mergers and Acquisitions

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By Casey C. Sullivan, Esq. on December 29, 2016 12:56 PM

Celebrities and Supreme Court justices weren't the only ones to die this year. 2016 saw the most broken M&A deals in recent history, according to the New York Times. In terms of transactions withdrawn after being publicly announced, this year was the biggest since the financial crisis of 2008, Michael J. de la Merced reports.

In total, busted deals represented nearly $800 billion, or almost a quarter of the $3.55 trillion in transactions announced during 2016.

Government Scrutiny Ends Big Deals

Among deals announced and withdraw were the mergers of Pfizer and Allergan and of Staples and Office Depot. In both those cases, the mergers were stopped after government intervention. The Staples-Office Depot merger was killed after the Federal Trade Commission brought an antitrust suit to shut the deal down, and won.

Pfizer's $160 billion plan to buy Allergan, the maker of Botox, was abandoned in April after U.S. Treasury Department adopted new anti-inversion rules. Pfizer's acquisition would have been the largest inversion ever, allowing the company to drastically reduce the taxes it pays by relocating to Ireland, where Allergan was based.

2016's Biggest M&A Failures

In total, 1,009 takeovers were cancelled this year, according to de la Merced. Those deals were worth $797.2 billion. The biggest was Pfizer, followed by the Honeywell and United Technologies merger, which was worth $90 billion, until it was ditched.

Energy Transfer Equity's failed $32.7 billion dollar plan to buy Williams Companies came in third, followed by the Halliburton-Baker Hughes merger that was blocked by the DOJ.

Mondelez, the people behind Cadbury and Nabisco, had the fifth biggest M&A bust, after its takeover of Hershey failed.

That hasn't stopped companies from making deals, however. The fall and winter months have seen a bevy of new M&A announcements. Time Warner and AT&T announced plans to merge in October. The deal would be worth over $85 billion, but it still faces political and regulatory scrutiny. Bayer and Monsanto also announced plans to merge. At $62 billion, it's the second biggest deal of the year, according to Fortune. But while Monsanto shareholders accepted the deal this month, it still needs to be approved by regulators.

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