Corporate MovesJuly 29, 2024

Value of Pension-Backed M&A Deals Soars to $13.6B in Q2

Despite seven fewer transactions than one year earlier, total deal value rose 158%.

Reported by Michael Katz

Mergers and acquisitions with direct pension fund involvement soared in the second quarter to $13.58 billion from $1.34 billion the previous quarter and $5.28 billion in Q2 2023, according to S&P Global Market Intelligence data.

It was the largest value for pension-backed M&A deals in a quarter since Q1 2023. But despite the surge in deal value, the number of transactions fell to 21 in the second quarter from 32 the previous quarter and 28 during the same period one year earlier.

During the first half of 2024, there were 53 deals worth a total of $14.92 billion, compared with 59 deals worth a total of $20.55 billion during the first half of 2023.

The largest M&A deal that had direct pension fund participation in this year’s second quarter involved the Canada Pension Plan Investment Board and private equity company Global Infrastructure Management LLC, which agreed to buy energy company Allete Inc. for $6.23 billion, including debt.

The second-biggest deal involved an investor group that included the Employees Provident Fund of Malaysia, which agreed to acquire the remaining stake it did not already own in Malaysia Airports Holdings for $3.18 billion. The third-largest deal involved a group that included the Labourer’s Pension Fund of Central and Eastern Canada, which acquired eStruxture Data Centers for $1.09 billion.

According to S&P, Canadian pension funds were involved in five of the 10 biggest deals during the second quarter, while private equity and venture capital firms were co-investors in three of the biggest deals.

Pension funds directed the most capital to the energy and utilities sector during the quarter at $7.72 billion in total, S&P reported, 19 times the $405.6 million pensions invested in the sectors during the same quarter last year. The industrial sector was targeted the second most with $4.26 billion, while pension fund-backed deals in the technology, media and telecom sector plummeted to $1.13 billion from $17.23 billion during the second quarter of 2023.