(23 January 2025 – United States) Citi investment bankers report US companies are set to target overseas deals on the back of a resurgent greenback, loosened regulatory settings and widening gap in international corporate valuation multiples.
M&A activity recovered strongly in 2024 as access to cheaper funding released pent-up demand to trigger higher deal flow after two subdued years.
“European stock markets have lagged the US, creating attractive acquisition targets for American corporates. You have gems of companies, sometimes we call them good houses in bad neighbourhoods, dollar earners, but trapped in certain jurisdictions where there’s a valuation impairment. US companies are eyeing them, private equity is eyeing those jewels” commented Citi Head of Banking and Executive Vice Chair, Vis Raghavan who leads a newly formed banking division at Citi.
Activity will be shaped by the actions of newly inaugurated President Trump as markets digest often contradictory signals from the new administration.
“Most banks have groups absolutely dedicated to really parsing through every line of what was said, what was not said, what the direction of travel is. Citi is absolutely at the forefront of the internal thinking and advising clients on what to expect.”
Raghavan, who joined the bank last year from JPMorgan, has yet to fill a vacancy for a Global Head of M&A at Citi.
“There is a lot of talent internally and I just want to take a call on how the months pan out, what momentum we have and then address that seat. We would be open to all ideas but there is such a deep bench there that I just want to evaluate what I have.”