In a record quarter for mergers and acquisitions, there was a missing piece — the mega-deal. One of Citigroup Inc.’s top dealmakers thinks it’s poised for a comeback.
“We certainly are seeing increasing activity amongst the larger, strategic deals,” Cary Kochman, the bank’s co-head of global M&A, said in a Bloomberg Television interview. “The part of the market which we should look to return is the $20 billion-plus, big strategic deal market, and in fact, the transcontinental part of the market.”
Deals in the first quarter surged past $1.1 trillion in the best start of the year since at least 1998, according to data compiled by Bloomberg. Yet mega-deals have been sparse, with no transactions above $50 billion since mid-2019, the data shows.
Kochman said deals between $1 billion and $10 billion have made a significant come back, and anticipates that transactions double in size are on the horizon. He also estimated that 70% of this year’s tally stemmed from strategic deals, where the buyer and seller are typically in a related industry. Among private equity sponsors, more than 90% involved a strategic acquisition or sale, he said.
“This is a market that’s characterized increasingly by strategic activity,” he said.