Dealmakers Face $50 Billion M&A Freeze Amid Mounting Troubles

Dealmakers brave enough to attempt big acquisitions are increasingly running into difficulties, as transactions get held up by everything from government haggling to regulatory worries.

(Bloomberg) — Dealmakers brave enough to attempt big acquisitions are increasingly running into difficulties, as transactions get held up by everything from government haggling to regulatory worries.

In just the last week, news emerged of about $50 billion of deals running into trouble. Bloomberg News reported Wednesday that Chinese white goods giant Midea Group Co. has dropped its pursuit of Electrolux AB, the $3.7 billion maker of Frigidaire appliances. It wasn’t able to fulfill demands for regulatory guarantees at a time of rising protectionism.

SES SA on Thursday confirmed a Bloomberg News report that it’s ended talks on a potential merger with Intelsat that would have formed a dominant satellite operator valued at more than $10 billion including debt. They couldn’t agree on terms of a deal and future strategy, people with knowledge of the matter said, and the transaction was always complicated by the Luxembourg government’s big stake in SES.

Meanwhile, Germany’s acquisition of its largest power grid from Dutch state-owned TenneT Holding BV will be delayed until after the summer as government officials hammer out a deal. Negotiators have struggled to agree on terms of the deal, which could be worth as much as €30 billion ($33 billion), Bloomberg News reported Wednesday.

Last week, a consortium backed by Apollo Global Management Inc. and former SoftBank Group Corp. executive Marcelo Claure ended talks on a takeover of $2.8 billion Latin American wireless operator Millicom International Cellular SA. That deal failure came against a backdrop of turbulent credit markets.

Citigroup Inc.’s planned $7 billion sale of its Mexican unit to local mining magnate German Larrea was scotched last month at the eleventh hour after the tycoon got into a dispute with the Mexican government. The US lender said it would instead pursue an initial public offering of the business.

And there are signs that other potential big deals face tricky negotiations. Bloomberg reported on Thursday that Covestro AG has rejected an initial takeover proposal from Abu Dhabi National Oil Co. valuing the German plastics firm at nearly €11 billion as too low.

Meanwhile, private equity firms have are also having difficulty getting transactions over the line, with around $30 billion of deals hitting trouble in recent weeks due to heady price demands and difficult financing markets.

–With assistance from Manuel Baigorri, Vinicy Chan and Liana Baker.

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