M&A activity falls despite early coronavirus fears

In April, several prominent Democrats proposed a moratorium on large mergers and acquisitions. Their argument was that the pandemic would embolden the strong to pounce on the weak, thus reducing competition.

Fast forward: The moratorium never materialized. Nor did the M&A feeding frenzy.

By the numbers: Announced deal value for U.S.-based companies through July 9 were down 64% from the same period in 2019, according to Refinitiv. Aggregate deal value between Q1 and Q2 2020 fell by more than 40%.

• The number of announced deals did increase slightly between year-to-date 2019 and 2020, but relatively few of those were large transactions that would rearrange the competitive landscape.
• There also was a sizable decrease for private equity-backed deals, in terms of both value and number of deals.

Between the lines: One reason for acquirer hesitance is that it's taking much longer to get deals over the finish line.

• Take the example of Visa, which in January agreed to pay $5.3 billion for fintech upstart Plaid.
• At the time, Visa said the deal would close in three to six months. Now Visa says it hopes to finish by year-end.
• Plaid CEO Zach Perret told me yesterday that the delay was largely driven by a slowdown in the regulatory process, as the federal bureaucracy adjusts to remote work.

Then there's the still-surging public equities market. Yes, buyers have more firepower — but many target prices are just too high for comfort, and there have been fewer-than-expected distressed situations.

• Robust federal lending programs have also kept a number of bankruptcies and near-bankruptcies at bay.

The bottom line: The pandemic continues to rage in America, and the M&A mitigation may ultimately look like a first wave phenomenon. But, at least for now, Monopoly needn't release a special 2020 edition.