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Since the beginning of this year, private equity firms have taken part in 6,298 deals worth $513 billion, not including the record $34 billion that Blackstone Group, Carlyle Group, and Hellman & Friedman paid for a majority stake in medical products giant Medline Industries, the Financial Times reported.
The number and value of the deals marks the strongest six-month stretch for private equity activity in more than 40 years, according to data firm Refinitiv.
Blackstone was a partner in three of the 10 biggest deals, which included its partnership with Macquarie Infrastructure and Real Assets to pay €9.3 billion for Italian transport company Atlantia’s toll-road business and also to take over Italian investment bank Casa Depositi e Prestiti.
The purchases were “certainly not inexpensive,” Blackstone COO Jon Gray told the FT, but said the companies will “benefit from long tailwinds,” indicating a positive long-term outlook.
“We’re big believers in the migration of almost everything online, the revolution in life sciences, the shift to sustainable energy, a shortage of housing since the global financial crisis, the global travel recovery, and the continued rise of the middle class in China and India,” he added.
Surging inflation is the biggest economic risk to the global economy, he warned.
Overall mergers and acquisitions, including the 82 percent of deals without private equity firms, set an all-time quarterly record value of $1.5 trillion through June, the fourth consecutive quarter in which such deals booked total values of more than $1 trillion, the FT said.
Since January, M&As have totaled $2.8 trillion, increasing by a record 129 percent year over year.
The marriage between Discovery Inc. and WarnerMedia alone was valued at $135 billion (“Discovery Inc. Expands Media Empire,” Trends Journal, 25 May, 2021).
SPACs were involved in 10 percent of the deals in this year’s second quarter, compared to 18 percent in the first. (See “Gamblers Dump SPACs,” Trends Journal, 25 May, 2021).
Still, Grab, an Asian ride-hailing company, went public through the SPAC Altimeter Growth Corp. in a merger valued at $40 billion.
Investment banks also booked a record $17.9 billion in fees for arranging the deals in this year’s first half, more than in any six-month period since records began being kept in 2000.
TRENDPOST: The COVID War and the economic collapse that accompanied it created an opportunity unparalleled in almost a century for Bigs to combine their cash with cheap debt to buy as much as they could across as much of the economy as they could, from U.S. rental houses to pan-European logistics networks (“Private Equity Firms Load Up on Cheap Debt to Buy Companies,” Trends Journal, 19 January 2021, and “The Bigs Keep Gobbling Up,” 18 May, 2021).
The last 15 months have helped the Bigs take a giant leap in their control of the economy, enabling them to concentrate even ownership, wealth, and power in their hands.