Summer deals heat up as 7-Eleven, Pop Tarts drive M&A wave: Report

By Crystal Tse and Ben Scent

A pair of megadeals in the consumer industry is keeping bankers busy during the normally quiet summer months, showing a rising confidence in the corporate world that’s helping extend a dealmaking revival. 
 

7-Eleven parent Seven & i Holdings Co. soared Monday after saying it’s received a takeover proposal from the owner of Circle K, taking the Japanese convenience store operator’s market value to around $38.5 billion. The announcement came the week after candy maker Mars Inc. agreed to buy Kellanova, the maker of Pringles chips and Pop Tart pastries, for nearly $36 billion. Both targets are attracting interest following pressure from activists.

Last month was already the busiest July for mergers and acquisitions in three years, led by Boeing Co.’s $4.7 billion purchase of parts supplier Spirit AeroSystems Holdings Inc. and Robert Bosch GmbH’s acquisition of $8 billion in air conditioning assets. More than $725 billion of deals have been announced globally since the start of June, up 20% from the same period in 2023, according to data compiled by Bloomberg.

“It’s been a particularly busy summer — especially compared to the last couple years — and you can feel higher energy returning to dealmaking,” said Elina Tetelbaum, a corporate partner at Wachtell Lipton Rosen & Katz. “With markets and investors anticipating a Federal Reserve rate cut in September, I think that positive momentum is likely to continue to accelerate through the end of the year and into 2025.”

A number of top banks — from JPMorgan Chase & Co. and Citigroup Inc. to Wells Fargo & Co. — reported rebounds in investment banking work during their midyear earnings as their traditional lending businesses come under pressure. Canadian pension giant Omers said last week it has its largest war chest in decades and is gearing up for a deal revival ahead as interest rates come down. Morgan Stanley Chief Executive Officer Ted Pick opined in July he’s “quite bullish” on the prospects for an M&A rebound.

Advanced Micro Devices Inc. announced its own major purchase Monday, agreeing to buy server maker ZT Systems for $4.9 billion to bolster the chipmaker’s efforts to compete with Nvidia Corp. More deals could be coming: Edgar Bronfman Jr., heir to a liquor fortune, is close to making an offer for Paramount Global in a last-minute challenge to Skydance Media’s agreed bid, Bloomberg News reported last week. 

Private equity firms have also been keeping busy. Lone Star Funds snapped up a $3 billion fire business from Carrier Global Corp. last week, while EQT AB is taking Asian real estate website PropertyGuru Group Ltd. private in a $1.1 billion deal. Carlyle Group Inc. agreed earlier this month to purchase Baxter International Inc.’s kidney-care unit for $3.8 billion, while CVC Capital Partners Plc and Nordic Capital are teaming up to buy UK investment platform Hargreaves Lansdown Plc for almost $7 billion.