california super bloom
Mario Anzuoni/Reuters
  • David Dubner, Goldman Sachs' global head of M&A, says there is a "superbloom" of M&A, separations activity.
  • Larger companies are leading the charge in M&A and separation activity, often considering "pure playification."
  • Dubner says he expects current M&A and separation levels to "continue for some time."
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Goldman Sachs' global head of M&A structuring, David Dubner, said in a "Daily Check-In" interview on Monday that he is seeing a "Superbloom" of mergers and acquisitions (M&A) as well as separation activity this year.

The Goldman Sachs exec said that management teams are assessing and reimagining their businesses as the US continues to emerge from the pandemic.

According to Dubner, larger companies are engaging in M&A and separation activity that "is multiples of what it was" during previous hot periods in 2002 and 2009.

A report from Refinitiv released on June 2 backs up Dubner's comments. According to the report, global mergers and acquisitions totaled a record $2.4 trillion in the first six months of 2021, up 158% from the same period last year.

Dubner said that a portion of this jump is a result of larger companies being more diversified than in the past which has some thinking about "simplification" and even what Dubner calls "pure-playification."

He also said that there are more multinational companies than in the past that are looking for global scale and using M&A to achieve their ambitions.

Many companies are also using spin-offs and Reverse Morris Trust Transactions ("effectively a spin-off combined with a merger") to avoid costly tax burdens of divestitures done through cash sales, Dubner said.

The Goldman Sachs head of M&A also touched on the rise of SPACs, saying the current macro background is "conducive" to increased M&A activity due to low-interest rates, increased liquidity, and beneficial tax policies.

The headwinds for M&A activity are mainly the current geopolitical environment which can extend the regulatory reviews of M&A deals, according to Dubner and his team.

Finally, Dubner said he expects current M&A and separation levels to "continue for some time."

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