[NEW YORK] Billions of US dollars worth of acquisitions and initial public offerings (IPOs) are on hold as Donald Trump’s trade war upends the global economy, twisting the knife into a dealmaking market that had already struggled to get going this year.
Ticket platform StubHub Holdings, fintech giant Klarna Bank and trading platform eToro Group have all pressed pause on planned listings, according to sources familiar with the matter, who asked not to be identified discussing confidential information. Offerings from adtech group MNTN and insurer Ategrity Specialty Holdings are also on hold, the sources said.
Those delaying listings, at least for now, include Medline Industries. The medical supply company, which was acquired by Blackstone, Carlyle Group and Hellman & Friedman in 2021 for US$34 billion in one of the largest leveraged buyouts of all time, was seeking to be valued at as much as US$50 billion in an IPO, Bloomberg News reported in November.
Their decisions come as markets extend deep losses in the wake of Trump’s move on Wednesday (Apr 2) to impose the steepest American tariffs in a century. The S&P 500 fell 6 per cent on Friday in its worst day since the onset of the coronavirus pandemic in March 2020. The two-day drubbing since Trump’s announcement wiped out US$5.4 trillion in market value.
“The market is justifiably reacting in an aggressive way,” said Jeremy Abelson, founder and portfolio manager at Irving Investors. “A company would be irresponsible to go out in this environment.”
A senior executive working in the IPO industry said they expected all listings to be delayed for at least the next two weeks, and that companies were unlikely to launch investor roadshows amid the volatility. EToro had been scheduled to begin its IPO roadshow next week.
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Companies could revive their listing plans once markets settle. Klarna is still aiming to go public as soon as that happens, a source familiar with the matter said.
M&A woes
The global stock rout is also affecting M&A markets.
Bloomberg News reported on Friday that French building materials producer Cie. de Saint-Gobain has decided to hold off on a sale of its auto glass unit, which could have fetched as much as 2.5 billion euros (S$3.7 billion). And private equity firm KKR has walked away from a consortium discussing a takeover of Gerresheimer, the German maker of packaging for drugs and cosmetics that has a market valuation of about two billion euros.
Over the past week, average spreads on US public transactions valued at more than US$100 million have continued to widen, data from alternative investment firm Accelerate Financial Technologies show, as traders become increasingly concerned some deals might not close. Up and down Wall Street, executives are starting to come to terms with the new reality and are considering revising down revenue projections for the year, raising the possibility of job cuts.
The fallout is a fresh blow to dealmakers, who’d been hoping for a banner year under Trump 2.0 only to find themselves disappointed by the uncertainty created by the president’s sweeping policy changes. Global M&A activity was sluggish throughout the first quarter and equity bankers were already starting to worry that highly anticipated IPOs could end up getting jammed.
The reality of Trump’s tariffs had been more painful than expected, Jim Zelter, president of Apollo Global Management, said on Thursday. “I think in C-suites and in boardrooms there is vision, there is a desire, but the practical reality is that things have come to a stop,” he said.
Some other transactions could be under threat include:
In the leveraged finance markets, debt being sold to back deals such as HIG Capital’s purchase of Canadian firm Converge Technology Solutions and ABC Technologies Holdings’s acquisition of TI Fluid Systems have been delayed, Bloomberg News has reported.
Suitors for a package of homecare brands being sold by Reckitt Benckiser Group have been trying to figure out how Trump’s tariffs will affect the assets, sources with knowledge of the matter said previously.
Court Square Capital Partners was planning to sell portfolio company Golden State Medical Supply, which provides generic drugs to the federal health system, but shelved those plans due to uncertainties around tariffs and other unknowns.
Rosebank Industries pulled out of a US$2 billion acquisition of Electrical Components International, blaming market volatility.
A 1.5 billion euros listing of German drugmaker Stada Arzneimittel, which had been expected to kick-start IPO activity in Europe, was delayed for the same reason. BLOOMBERG
