Trade tensions pause mergers and acquisitions and initial public offerings worth billions

The global market for mergers and acquisitions (M&A) and initial public offerings (IPOs) is experiencing a significant pause due to the effects of the trade war initiated by US President Donald Trump. This pause is disrupting the deal-making landscape, which was already facing challenges in getting off the ground this year.

Several high-profile companies have decided to put their plans for acquisitions and IPOs on hold amid the uncertainty caused by the ongoing trade war. Ticket platform StubHub Holdings Inc, fintech giant Klarna Bank AB, and trading platform eToro Group Ltd are among those who have decided to delay their listings. Additionally, adtech group MNTN Inc and insurer Ategrity Specialty Holdings are also holding off on their offerings.

One notable company that has postponed its IPO is Medline Industries Inc, a medical supply company that was previously acquired by major investment firms. Medline Industries Inc was seeking a valuation of up to US$50 billion in its IPO, but the current market conditions have led them to delay their listing plans.

The recent market turmoil, triggered by President Trump’s tariff announcement, has led to substantial losses in global markets. The S&P 500 experienced a 6% decline on April 4, marking its worst day since the onset of the coronavirus pandemic. The total market value lost over the past two days has amounted to a staggering US$5.4 trillion.

Industry experts predict that the uncertainty in the market will lead to a delay in all upcoming listings for at least the next two weeks. Companies are hesitant to launch investor roadshows during this period of volatility. Klarna, one of the companies that put its IPO on hold, still intends to go public once the market stabilizes.

The impact of the trade war extends beyond IPOs to the M&A market as well. Companies such as Cie de Saint-Gobain and private equity firm KKR & Co have decided to postpone major deals due to the current market conditions. The average spreads on US public transactions valued over US$100 million have continued to widen, indicating growing concerns about the closure of these deals.

Executives on Wall Street are preparing for the possibility of revising revenue projections and implementing job cuts in response to the market turmoil caused by the trade war. Deal makers who were hopeful for a strong year under “Trump 2.0” are now facing disappointment and uncertainty.

Overall, the global market for M&A and IPOs is facing a challenging period as the trade war disrupts business operations and market dynamics. Companies are reevaluating their strategies and timelines in response to the evolving economic landscape.