JPMorgan Heralds M&A Bonanza as Companies Seek New Ways to Growby
Head of North American M&A Aiyengar speaks on Bloomberg TV
Says companies are getting bolder about vertical integration
As companies get more creative in their pursuit of growth, they’re increasingly looking outside their own immediate sector for targets, according to JPMorgan Chase & Co.’s head of M&A in North America.
“People are no longer thinking about horizontal deals and are instead making bolder moves in terms of vertical integration,” Anu Aiyengar said Monday in an interview on Bloomberg TV.
Telecommunications giant AT&T Inc.’s planned $85.4 billion acquisition of Time Warner Inc. is one good example of the trend, Aiyengar said, marking a convergence between telecoms and media content and distribution.
JPMorgan played a key part in what Aiyengar termed a “merger weekend bonanza” of the past 72 hours, advising AT&T on the Time Warner deal, Rockwell Collins Inc. on its acquisition of B/E Aerospace Inc., and HNA Group Co. on the purchase of a 25 percent stake in Hilton Worldwide Holdings Inc.
Some 123 deals were announced this weekend through Monday around 2 p.m. in New York, according to data compiled by Bloomberg, with a total value of about $134 billion.
“The common driver in all of them is the need for growth,” Aiyengar said of the three deals across the media, aerospace and real estate sectors. “People are thinking much more creatively about growth.”
Chinese companies are also impacting dealmaking in the U.S., after gaining more comfort and expertise in buying American businesses, Aiyengar said -- as shown in Haikou City, China-based HNA’s deal with Hilton. Many favor taking a minority stake in companies that give them access to growth outside of their domestic market, she said, focusing on industries such as technology, real estate or retail.