Banks Will Be Slow to Get Back into the M&A Game

banks
Bank of England, est. 1694

The Pandemic Shrank the U.S. Economy by a Third

The shelter-at-home orders in many states designed to thwart the spread of COVID-19 caused the U.S. economy to wane. The annualized pace in the three months through June 2020 equalled 37.1%. It was the most dramatic slowdown of the post-World War II era. The effects of the pandemic on the economuy have been devastating. More than 60 million Americans at least temporarily lost their jobs.

Last Year Signaled Great Activity for Banks — Pre-Pandemic

A burst of mergers and acquisitions at the end of 2019 convinced many Wall Street analysts that we could expect 2020 to be a strong one for M&A in the financial industry. For example, in May, there was increasing speculation that Goldman Sachs Group was looking to make an M&A impression once SunTrust Banks Inc. and BB&T Corp. announced a $66 billion merger in December that created Truist Financial Corp., the sixth-largest bank in the United States.

Not just Banks,Other M&A Activity Increasing

Nvidia recently agreed to acquire SoftBank Group’s Arm Holdings for $40 billion; Gilead Sciences Inc. announced a $21 billion merger with Immunomedics; and Verizon Communications has locked down a $6.25 billion purchase for America Movil SAB’s wireless phone reseller Tracfone.

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Carpenter Wellington PLLC

Carpenter Wellington PLLC

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Ryan Carpenter serves as Attorney and Managing Director of Carpenter Wellington. Ryan advises clients across a broad set of corporate and commercial matters.