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106 The US-Israel Legal Review 2019
US: MERGERS & ACQUISITIONS
T
he political and economic backdrop may be
unstable, but 2018 was a strong year for US
M&A, especially domestically. However, a strong
stockmarket cannot last forever, nor can a booming
M&A market.
The US M&A market delivered another year of
strong performance in 2018. Though deal volume
dipped 2 percent year-on-year to 5,682 deals, deal
value was up by 15 percent over the period, to
US$1.5 trillion.
A number of large deals in a thriving domestic
M&Amarket drove the rise in value. The ten largest
US transactions recorded over the period were all
domestic deals, and domestic deal value climbed 23
percent year-on-year to US$1.2 trillion.
Domestic dealmakers have drawn confidence
from the steady growth of the US economy, low
unemployment, business-friendly tax cuts and
strong stock market performance.
CROSS-BORDER ACTIVITY TAKES A HIT
The boomwas tempered somewhat by slower cross-
border activity. Inbound M&A into the US fell by 10
percent year-on-year in 2018 to US$277.5 billion.
The drop in inbound M&A has been exacerbated by
tougher regulations and checks on foreign buyers
investing in the US. In March, President Trump
blocked, onnational security grounds, the hostile bid
for US chipmaker Qualcomm by rival Broadcom, then
based in Singapore. And in April, the US government
banned US companies from dealing with Chinese
telecoms equipment manufacturer ZTE.
Broadcom was later allowed to acquire New
York–based CA Technologies in a US$18 billion
megadeal after redomiciling to San Jose, but the
environment for foreign buyers investing in the US
has become less friendly. In August, CFIUS had its
scope broadened significantly when FIRRMA was
signed into law. It is no coincidence that inbound
M&A has fallen as these measures have been put
into action. Inbound M&A from Chinese bidders
was down 66 percent by value year-on-year, to
US$3 billion, while volume was down 40 percent
to 38 deals. With US economic policy following
an increasingly protectionist path, deals by US
dealmakers overseas have also stumbled in 2018.
Outbound deal value has fallen by 8 percent year-
on- year to US$324 billion in 2018.
USM&AWeathers
Geopolitical Storms
While 2018 was a strong year for the US M&A market, slower
cross-border activity put the brakes on the boom somewhat.
Partners fromWhite & Case LLP survey the landscape.
The drop in inboundM&A has
been exacerbated by tougher
regulations and checks on foreign
buyers investing in the US.