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March Madness Goes Ghost for M&A

“While the proposed takeovers of Dell Inc. (DELL) and H.J. Heinz Co. dominated headlines in the first quarter, global dealmaking stumbled, with March on track to be the worst month for mergers in more than three years.

Takeovers fell 4.4 percent from a year ago and 36 percent from the previous quarter to more than $461 billion, according to data compiled by Bloomberg as of March 27. Berkshire Hathaway Inc. (BRK/A)’s $23 billion purchase of Heinz and the $24.4 billion buyout of Dell Inc. (DELL) in February failed to spark a rally in March, when mergers shrank to $100 billion, on track for the worst month since 2009.

Concern about U.S. spending cuts, leadership changes inChina and persistent sovereign debt problems in Europe are weighing on executive confidence, said Mark Shafir, global co- head of mergers and acquisitions at New York-based Citigroup Inc. (C) Still, record cash piles and global equity markets at an almost five-year high are pushing more companies to weigh acquisitions to lock in growth before interest rates rise.

“There is still a lot of hesitancy among corporates to do big deals,” said Henrik Aslaksen, global head of M&A at Frankfurt-based Deutsche Bank AG. (DBK) “There is a psychological barrier, but there is no doubt that the dialogue and intensity are increasing.” …”

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