Merger Monday Returns With Gilead, Oracle And NVIDIA In Focus

Global mergers and acquisitions had an abysmal second quarter this year as Covid-19 spread across the world.

According to Refinitiv, global M&A totaled $485.3 billion in the second quarter, a decline of 55% from the same period a year earlier. The total marks the lowest dollar amount for M&A activity since the third quarter of 2009, while the 8,272 deals in the second quarter marked the lowest quarterly deal volume since the third quarter of 2004.

The return of merger Monday yesterday provided a boost to the depressed M&A totals for the year as the third quarter nears an end. The $69 billion of deals announced over the weekend was the most since November 2019.

In the semiconductor industry's largest acquisition ever, Nvidia (NASDAQ:NVDA) agreed to acquire Arm Holdings from Softbank Group (T:9984) for $40 billion in cash and stock. The deal is a huge win for SoftBank, which bought Arm for $31.4 billion in 2016.

"AI is the most powerful technology force of our time and has launched a new wave of computing," Nvidia founder and CEO Jensen Huang said. "In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today's internet-of-people. Our combination will create a company fabulously positioned for the age of AI."

In the biotechnology sector, Gilead Sciences (NASDAQ:GILD) announced it will acquire Immunomedics (NASDAQ:IMMU) in a $21 billion deal to expand Gilead's availability of cancer treatments. The deal, which will be funded by cash and debt, caused shares of Immunomedics to soar more than 100% yesterday.

IMMU Stock Price Chart

"This acquisition represents significant progress in Gilead's work to build a strong and diverse oncology portfolio," Gilead CEO Daniel O’Day said. "Trodelvy is an approved, transformational medicine for a form of cancer that is particularly challenging to treat. We will now continue to explore its potential to treat many other types of cancer."

Hopefully, the TikTok saga will come to a close as Oracle (NYSE:ORCL) confirmed yesterday it reached a deal with ByteDance for TikTok's U.S. operations by serving as a "trusted technology provider."

"We can confirm that we've submitted a proposal to the Treasury Department which we believe would resolve the Administration's security concerns," TikTok said. "This proposal would enable us to continue supporting our community of 100 million people in the U.S. who love TikTok for connection and entertainment, as well as the hundreds of thousands of small business owners and creators who rely upon TikTok to grow their livelihoods and build meaningful careers."

Lost among the other deals was Verizon (NYSE:VZ)'s $6.25 billion acquisition announcement of Tracfone, a unit of Mexican telecom America Movil (NYSE:AMX). The deal, which could be worth another $650 million if performance measures are met, enables Verizon to expand its prepaid mobile business. By gaining prepaid customers, Verizon can try to move them to higher-priced plans.

While M&A activity has been slow this year, it remains to be seen if this week's slew of deals will lead to more deal announcements to close out the year.