It’s a Scorching Hot Summer for Deals on Wall Street. Vacation Can Wait.
Busiest week for dealmaking since 2021 has bankers and lawyers scrambling
By Lauren Thomas and Ben Glickman
ILLUSTRATION: EMIL LENDOF/WSJ, ISTOCKKey Points
- Dealmakers are experiencing a sudden rebound in deal activity, leading to a surge of work during what is usually a slow time of year.
- Last week was the highest-volume week for M&A for U.S. companies since 2021, according to LSEG.
Late summer is typically one of the slowest times for dealmakers.
Not this one.
A sudden rebound in corporate tie-ups has bankers and lawyers scrambling.
Vacation homes are sitting empty, families are being left in the lurch—and dealmakers are more energized than they have been in years.
The past week alone was the highest-volume week for mergers and acquisitions for U.S. companies since 2021, according to LSEG.
“There’s a lot of dialogue taking place on large transactions that had been a glimmer in people’s eyes for a long while,” said Tony Kim, co-president of Centerview Partners.
He said this is likely going to be the busiest August the firm has had in years.
Dealmakers are known to be an optimistic bunch, perennially citing “green shoots,” or banker lingo for early-stage deals in the pipeline.
After predicting a deal bonanza in President Trump’s second administration, many found themselves eating their words when activity was underwhelming during the first several months of his term.
Now they are drowning in work.
One banker said his wife and young children are in Europe without him.
He originally planned to join them for most of August but now has a packed calendar of deal pitches.
Another was hoping to check on the progress of a new beach home she is building in the Florida Panhandle but sent her husband down instead.
Executives and advisers attribute the renewed confidence to strike deals to the relatively strong economy, despite some hiccups, and expectation of lower rates.
A flurry of trade pacts out of Washington added momentum.
“You have the right formula now for increasing M&A activity,” said Frank Aquila, a senior M&A partner at Sullivan & Cromwell.
He expects things to be busier than usual in August and even busier after Labor Day.
“Luckily, I took an early vacation this year, so I’m ready,” he said.
This past week’s deal spree included the biggest of the year so far: Union Pacific’s $71.5 billion acquisition of Norfolk Southern, a fellow railroad.
Union Pacific freight train.
Union Pacific’s acquisition of Norfolk Southern would create the U.S.’s first coast-to-coast rail operator. Photo: Brandon Bell/Getty ImagesA deal between two of the country’s four major railroads might have been unimaginable to attempt a year ago.
Rather than blocking deals, the Trump administration is thought to be more open to accepting so-called remedies to let them happen.
Among the motivating factors to get deals done at big banks like Goldman Sachs, JPMorgan Chase, Bank of America and Morgan Stanley are bonus payouts, which are typically tied to the amount of deal fees bankers bring in.
Bankers who had been staring down the possibility of lower payouts later this year are feeling more optimistic.
Dealmakers faced sharp cuts to their bonuses in 2022 as M&A went quiet, and banks had to trim ranks.
JPMorgan’s global head of M&A, Anu Aiyengar, has used recent internal meetings to rally her team around big deals being back, urging them to seize the moment with clients before the year is over.
Also last week, Palo Alto Networks inked a $25 billion acquisition of the Israeli cybersecurity firm CyberArk, and the oil field services provider Baker Hughes signed up a roughly $13 billion deal for Chart Industries.
A splashy public debut Thursday of the software company Figma—whose share price more than tripled—helped revive a sleepy initial public offering market.
Other deal deliberations are continuing.
Kraft Heinz is mulling a breakup.
The Band-Aid and Tylenol owner, Kenvue, is examining strategic alternatives to boost shares.
LVMH has been holding talks to sell Marc Jacobs.
Union Pacific’s pursuit of Norfolk Southern could prompt another major railroad deal.
And a bank merger announced last month has advisers hopeful for more bank deals.
Centerview’s Kim said there are still some jitters that make it hard to get deals across the finish line, especially the big ones.
“But the fact that we’re seeing more deals get done, even with that backdrop, it’s definitely a positive,” he said.
And when the stars align, it can be euphoric.
In mid-July, Chevron was finally able to close its $53 billion acquisition of Hess, more than 20 months after it was announced.
Exxon Mobil had challenged some of Hess’s oil rights.
One adviser on the Chevron deal chartered a helicopter from New York City to the Hamptons the day approval came.
He splurged for tables at the Montauk hot spot Surf Lodge, where Casamigos bottle service costs $950, to celebrate.
The banks on the deal made combined fees of around $175 million, according to LSEG.
Not everyone is so quick to toast a win.
One top banker was asked how he planned to celebrate his firm’s role on the railroad megadeal.
“You get to the office, and you look for the next one,” he said.
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