Each great bull market has its defining M&A moment: There was the fight for control of RJR Nabisco during the junk bond fever of the late 1980s, the merger of America Online Ltd and Time Warner at the height of the tech boom at the turn of the century and the audacious plan for a hostile takeover of Rio Tinto by BHP Billiton at the very end of the recent bull market in commodities.
The deal was called off on Tuesday. Falling commodity prices were the final straw to break what was seen as a very complex deal.
In February, BHP Billiton had made a $147 billion, all-share, bid for Rio Tinto. The combined entity would have controlled gigantic, price- making amounts of minerals such as iron, manganese, aluminium, copper and coal. Regulators in Europe and elsewhere were rightly worried about the price-setting power of the merged firm.
What regulators could not derail, the markets did. The surge in commodity prices has ended, making the deal unattractive.
Has the curtain fallen on yet another M&A era?