Of mists and M&A fruitfulness

Autumn heralds a worldwide corporate fight-back, led by telecoms sector

What a difference a month makes, if the M&A market is to be believed. After a dismal last week in August, when the value of worldwide deals dropped to its lowest value this year, the first week in September racked up a staggering $163bn (£103bn) worth. That figure leapfrogs the value of deals for the previous week – $20bn.

The cause of the September cheer? Communication. Not a surge in magic circle team-building but an explosion in telecoms deals, driving work to a few lucky firms. The number of deals conducted so far in September is actually slightly lower than the average for the previous month, but the total value rocketed to more than double the previous top-value week in 2013.


The beginning of the month saw Macfarlanes and Wachtell Lipton, Rosen & Katz take lead roles in advising Verizon Communications in its $130bn acquisition of a 45 per cent stake in Vodafone’s joint venture Verizon Wireless. Slaughter and May and Simpson Thacher & Bartlett also got a slice of the action in the US.

The next day saw another hefty job for Simpson Thacher, advising Microsoft on the £4.6bn acquisition of Nokia’s mobile phone unit with Covington & Burling, opposite Skadden Arps Meagher & Flom.

These deals were followed by GlaxoSmithKline’s (GSK) sale of drinks brands Lucozade and Ribena – a job nabbed by Allen & Overy (A&O) for GSK and Clifford Chance for Japanese buyer Suntory.

So what’s the rush? Some say the US Fed’s expected tightening of monetary policy and rising UK interest rates are pushing cautious investors to deal now while the going is good.

But not everyone agrees. A&O corporate partner Ed Barnett, who advised GSK, says the frisson is due to an increased appetite among private equity firms stirring from a summer slumber and producing a good climate for firms re-evaluating their assets.

“Confidence is coming back and companies are refocusing and looking at non-core assets,” he says. 

Whatever the answer, M&A lawyers are cracking open the champers – or should that be the Japanese Ribena?