AGN Allergan plc

By Dana Mattioli 

Deal making just had its biggest week since the dot-com boom.

More than five multibillion dollar deals were announced this past week, totaling $207 billion in deal volume globally. That is the biggest week since 1999, according to data provider Dealogic. That includes British American Tobacco PLC's proposed purchase of the rest of Reynolds American and AT&T Inc.'s blockbuster $85.4 billion deal to buy Time Warner Inc., the largest acquisition announced this year.

The timing of the deals -- just weeks before a presidential election -- defies conventional wisdom. Chief executives typically wait out an election to see what impact a new president may have on the regulatory environment and how that affects their strategy.

The fact that so many have just been announced reflects increasing confidence in boardrooms that Hillary Clinton will be elected president, observers say.

Still some deal makers found the timing of AT&T's offer to buy Time Warner particularly puzzling in light of its past regulatory troubles. In 2011, AT&T had to pay T-Mobile US Inc. a $4 billion breakup fee, or 10.2% of the total purchase price for T-Mobile, after the transaction faced government opposition.

While AT&T's deal for Time Warner has the potential to reshape the media landscape, it will have to navigate possible strong opposition from U.S. antitrust authorities as well as objections by lawmakers and media and telecom rivals.

The deal comes at a time when many of the largest mergers have fallen apart due to what CEOs have characterized as a tougher antitrust environment. In April, Pfizer, for instance, walked away from its planned $150 billion merger with Allergan PLC after the Obama administration took aim at it, which would have been moved the combined company overseas. In May, a federal judge blocked the planned merger of rivals Staples and Office Depot because of antitrust concerns.

Even so, deal makers are expecting a strong finish to the year, especially with the debt cheap and readily available and companies facing anemic growth. Indeed, Chip maker Qualcomm is expected to announce as early as this week the roughly $40 billion purchase of NXP Semiconductors, according to people familiar with the matter.

In addition to the Time Warner deal, aerospace equipment supplier Rockwell Collins Inc. agreed to buy B/E Aerospace Inc. for $6.4 billion and on Monday TD Ameritrade Holding agreed to acquire Scottrade Financial Services Inc. in a $4 billion deal.

"The timing of the election had nothing to do with our decision," said TD Ameritrade CEO Tim Hockey in an interview on Monday. Mr. Hockey added that technology and scale are becoming more important in his industry and that impacted his decision to strike a deal with Scottrade.

The trend of Chinese buyers looking to the U.S. for growth also was on display this weekend. China Oceanwide Holdings Group Co. inked a $2.7 billion deal to buy insurance company Genworth Financial on Sunday. On Monday, China's HNA Group bought 25% of hotel chain Hilton Worldwide Holdings for $6.5 billion.

(END) Dow Jones Newswires

October 25, 2016 02:47 ET (06:47 GMT)

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