Merger Monday

The announcement of completed M&A deals on Mondays

Written by CFI Team

What is Merger Monday?

Merger Monday refers to the practice by companies of announcing major mergers and acquisitions on a Monday. The involved parties finalize the details of the deal over the weekend and make the announcement first thing on Monday morning. The goal is, of course, to pass on the information about the joining of two (or more) companies, but the intent is to help drive the stock prices of said companies up with the announcement.

Merger Monday

Summary:

Merger Monday is a term invented by Wall Street to denote the fact that major players in the market often finalize major mergers and acquisitions during the weekend and announce them on Monday.
The goal for Monday announcements is to help sway stock prices in favor of the companies making major plays in the market.
For a time, Monday announcements of mergers and acquisitions seemed to die out, with companies choosing to release news of their dealings as they happened; 2019 seems to be the year that reintroduced Merger Monday into the financial vernacular.

The Death of Merger Mondays

It seemed, for a time at least, that Merger Mondays were a thing of the past. Companies weren’t waiting to release information on acquisitions. Traditional Wall Streeters still pushed to make deals, however, many began making their announcements on Tuesdays. Some even began revealing mergers on Fridays.

While many companies decided to announce their mergers and acquisitions (M&As) on other days, analysts found that by looking into more recent data, Merger Mondays are still very much alive and well. In 2014, 37% of all M&A deals (valued at $1 billion or better) were announced on a Monday. In 2015, 33% were announced on a Monday.

Merger Monday 2019

The strength of Merger Monday is evident in 2019. Monday announcements of major events continued throughout the month of June. The most recent deals include:

Prosperity Bancshares’ acquisition of LegacyTexas for $2.1 billion in a cash and stock deal.
Pfizer’s purchase of Array Biopharma for $11.4 billion.
Keane Group’s merger with C&J Energy Services.
BidFair’s acquisition of Sotheby’s for $3.7 billion.

Probably the strongest evidence for the return of Merger Monday is the first week of June 2019. On Monday, June 3, Bloomberg compiled data on an astonishing number of major deals, all by 3 p.m. It was the second biggest day—in terms of cash—for the year. Among the $40 billion dollars in deals announced on this particular day, the most notable include Blackstone Group LP’s acquisition of some GLP Pte’s warehouses for $18.7 billion.

Other worthy mentions include the purchase of El Paso Electric Co. by JPMorgan Chase & Co. for $2.78 billion, as well as Hospitality Properties Trust’s acquisition of Spirit MTA REIT’s portfolio of rentals, valued at $2.4 billion.

With more than $1 trillion in deals done so far in 2019, nearly 30% were announced on Mondays.

Additional Resources

Buy Side vs Sell Side M&A

Black Friday

Cyber Monday

M&A Considerations and Implications

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