Does Dow’s drop doom deals?
After Thursday’s dizzying drops, U.S. markets fell again on Friday. Could the continuing drop in the market wreak havoc in the deal space? When the market dropped sharply in 2008, several large deals fell apart or nearly did, including Hexion’s scuttled takeover of Huntsman Corp and Dow Chemical’s takeover of Rohm and Haas.
If the market declines in coming days it may put deals and restructurings on hold as companies re-assess how much they are worth and lenders take another look at the financing, experts said.
One mergers and acquisitions banker said that it would take more than one day to have a negative effect.
“One bad day does not kill a deal. A prolonged stretch of bad days could, but one day does not a disaster make,” he said.