Global M&A activity drops 35% to $783 bn in Q3 on US-China trade tensions

Global mergers and acquisitions dropped to $783 billion in the third quarter, down 35 per cent from the prior quarter, as the escalating trade dispute between the United States and China cast a shadow on the financial and regulatory prospects of some deals.

US chip maker Qualcomm Inc pulled its planned $44 billion acquisition of NXP Semiconductors NV in July after China delayed offering antitrust clearance, a move seen as retaliatory to the trade tariffs announced by the United States.

This has cast uncertainty on the prospects of other deals involving global companies that require Chinese regulatory approval, including aerospace supplier United Technologies Corp's $23 billion acquisition of Rockwell Collins Inc .

"We've got some clouds on the horizon, vis a vis a trade skirmish, or potentially a trade war with China. You have the potential for a hard Brexit and we've got rising rates," said Mark Shafir, Citigroup Inc's global co-head of M&A.