Failed deals top $200bn this year

The value of cancelled deals globally has broken the $200 billion mark in 2007, easily surpassing last year’s total.

The value of withdrawn buyouts has risen to $205.6 billion (€140 billion) in the year to date compared with $127.1 billion in the whole of 2006, according to data provider Dealogic.

Europe has been home to $107.5 billion of failed deals so far this year, while the US has accounted for $63.4 billion. At this stage of 2006, the value of failed deals stood at $58.4 billion and $58.9 billion for Europe and the US respectively.

The impact of the credit crunch has caused some high-profile deals to collapse, including Qatari-backed investment firm Three Delta’s $15.5 billion bid for UK supermarket chain Sainsbury’s this month.

However, high-profile failed bids that pre-dated current market difficulties have had a bigger influence on the figures. These include UK buyout firm Terra Firma’s $23.9 billion offer for pharmacist Alliance Boots in April, which was trumped by Kohlberg Kravis Roberts’ successful rival bid; Airline Partners Australia’s failed attempt to buy airline Qantas in May for $10.3 billion; and the CVC Capital Partners-led consortium’s $23 billion rejected bid for Sainsbury’s in April.

There were $67.5 billion of withdrawn bids in April and $28.2 billion in March at the height of the buyout boom. There have been $17.2 billion of failed bids in October and $22.1 billion in November, representing an increase from the $10 billion total in September and $2.6 billion in August (when the immediate impact of the credit crunch was to produce a deal hiatus).

A likely future addition to the statistics is CVC Capital Partners’ €16.2 billion ($23.8 billion) bid for Spanish cigarette maker Altadis, which was shelved after UK trade buyer Imperial Tobacco’s bid for the company was accepted in August. But this will not happen until the Imperial Tobacco deal is made official following regulatory approvals.