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Mergers and acquisitions make a comeback as TikTok deal seizes headlines

04 August 2020
 Dan Ackermann

A slew of high-profile headlines led by Microsoft's expected acquisition of social media video app TikTok helped bring the Nasdaq to another record high on Monday.

Why it matters: The mergers-and-acquisitions market looks like it's bouncing back, joining the revived credit and equity markets as well as the market for new public companies through IPOs and special purpose acquisition companies (SPACs).

  • Goldman Sachs did warn in a recent note to clients that the 51 SPAC offerings this year — raising a record $21.5 billion that's up 145% from the same period a year ago — have lagged on performance so far.

What's happening: In addition to Microsoft's big pickup, security company ADT saw its shares jump 56.6% on news that Google plans to buy a nearly 7% stake for $450 million to use ADT services in its Nest home security devices.

  • Varian Medical Systems jumped 22% on news of a $16 billion buyout by Germany’s Siemens Healthineers, and Kansas City Southern gained after a report of a takeover bid expected to be worth $20 billion, Reuters reported.

Flashback: Data firm CB Insights reported last month that M&A deals started picking back up in the back half of the second quarter, but with significantly more deals in Asia where VC deal activity rose 20% quarter over quarter.

  • North America and the rest of the world now look to be picking up the pace.

The big picture: “The market is revolving around M&A activity possibly picking up,” Jake Dollarhide, CEO of Longbow Asset Management, told Reuters. “It means CEOs are more confident about the future. Otherwise, why would they lay out billions of dollars?”

Yes, but: As Axios' Dan Primack noted in mid-July, the approval time for big deals has been increasing as the coronavirus pandemic has slowed and scattered government agencies needed to sign off on them.

  • In general, U.S. regulators have beefed up scrutiny of new deals, especially when there are multibillion-dollar companies involved.
  • This could mean that even as more firms agree to tie-ups in 2020, they could be delayed through the end of the year.

By the numbers: The announced deal value for U.S.-based companies through July 9 was 64% lower than the same period in 2019, according to Refinitiv, with aggregate deal value between Q1 and Q2 2020 down more than 40%.

Transcripts show George Floyd told police "I can't breathe" over 20 times

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Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.

Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.

The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.

  • The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.

What the transcripts say:

  • Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
  • The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
  • Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."

Read the transcripts via DocumentCloud.