(Reuters) -President Joe Biden's stricter legislation on large corporate mergers has given rise to increased investment by investors in the failure of certain deals and threatened to put the brakes on a record high.
Spreads between deal prices and stock prices for acquisition targets increased this week after the Federal Trade Commission said on Tuesday that an increase in mergers and acquisitions would delay antitrust reviews and that companies that did not wait for their results completed their deals at their own risk .
On Wednesday, it was reported that the Department of Justice was considering a lawsuit to block UnitedHealth Group's nearly $ 8 billion for acquiring health care analysts and technology provider Change Healthcare. Such a move would follow its mood to block Aon PLC's $ 30 billion acquisition of rival Willis Towers' Watson PLC, which resulted in Aon abandoning the deal last month. Roy Behren, a member of Westchester Capital Management, which currently has $ 5.1
The White House did not immediately respond to a request for comment.
Widened spreads include the proposed $ 33.6 billion deal between Canadian National Railway and Kansas City Southern, as both companies are awaiting approval from the Surface Transportation Board. Shares in Kansas City are currently trading at $ 262 a share, well below the agreed $ 269 per share liquidity deal. based call center operator Five9 Inc. and medical device maker Thermo Fishers' $ 17.4 billion acquisition of contract researcher PPD Inc.
Increasing fusion investor anxiety is fueling escalating geopolitical tensions between China and the United States. China can counter mergers of US companies if they have a significant presence in the country.
The spread of the semiconductor designer Advanced Micro Devices Inc .:'s acquisition of Xilinx Inc. of $ 35 billion has increased in recent days for that reason, investors said. .
"The climate of fear of transactions requiring Chinese approval is as difficult as I have seen for many, many years," Behren said. uncertainty. They exploded dramatically in March 2020, when Wall Street worried about the economic downturn in the coronavirus outbreak.