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NEW YORK, March 28 (Reuters) - Mergers and acquisitions (M&A) bounced back in the first quarter after a downbeat 2023, thanks to the return of mega deals, cheering investment bankers and lawyers waiting for a pick-up.

Total M&A volumes globally climbed 30% to about $755.1 billion, according to the most recent data from Dealogic. The number of transactions worth more than $10 billion jumped to 14, compared with five during the same period last year.

Investment bankers said boardroom confidence for dealmaking has improved on the back of strong earnings, potential interest rate cuts this year and an ebullient market.

"When you see larger deals happening, it's a much more direct sign of the returning health of the market, because boards and CEOs, due to the nature of large deals, are going to be more conservative when they approach them," said Blair Effron, co-founder of investment bank Centerview Partners. "We do think that the activity that we see today is heading in the right direction."

U.S. M&A volumes surged 59% to $431.8 billion. European deals jumped 64%, while Asia Pacific volumes slumped 40%. Dealmakers said a potential market recovery, following the successful debuts of Astera Labs and Reddit, could provide a boost to the pipeline.

"The fact that we've got two data points in the IPO market...gives the CEOs, boards and financial sponsors that we're talking to, a sense that there might be multiple paths to achieve their objectives rather than one," said Tyler Dickson, head of investment banking at Citigroup.

Leveraged buyout volumes, which slumped last year due to a spike in financing costs, declined 7% to $91 billion.

"We're still waiting for the private equity work to really pick up - that's still the missing ingredient," said Krishna Veeraraghavan, global co-head of the M&A group at law firm Paul, Weiss, Rifkind, Wharton & Garrison. "You still are seeing a mismatch between what sellers expect their assets to transact for and what buyers are willing to pay based on where rates are right now."

During the quarter, several large companies capitalized on strong valuations to finance big deals, while some investment grade companies borrowed to pursue high-value targets.

Bankers and M&A lawyers said their pipelines look robust, with cash-flush buyers pursuing targets as fears of a recession subside.

"The base case is probably a soft landing type scenario for the economy, and that inflation is under control," said Ivan Farman, co-head of global M&A at Bank of America. "As a result, boards and management teams feel more comfortable about the future and that's when they're more likely to pursue deals."

Capital One's $35.3 billion takeover of Discover Financial, Synopsys' deal to acquire design software rival Ansys for $35 billion, and Diamondback Energy's $26 billion tie-up with Endeavor Energy were the quarter's largest transactions.

Structured deals, which include spin-offs, separation, and carve-out transactions, also drove volumes. Large publicly traded companies conducted strategic reviews and either shed non-core units or separated faster-growing businesses.

Notable deals included building materials giant Holcim's spin-off of its North American operations in a deal that could value the business at $30 billion and Unilever's ice cream spin-off. During the quarter, 13 corporate separation transactions with an expected value of more than $1 billion were announced globally, compared with eight during the same period last year, according to David Dubner, global head of M&A structuring at Goldman Sachs.

"2024 is on path to be one of the highest years in terms of corporate separation activity, and the dialogue we're having is supportive of that theme as we look forward," said Dubner.

RETURN OF TECH

The technology sector is traditionally the biggest driver of deals but underwent a slump last year.

It has since recovered to bring in the largest share of transactions with volumes up more than 42% to $153.8 billion.

Blockbuster deals in oil and gas, which propped up volumes towards the end of last year, showed no signs of slowing, driven primarily by consolidation in the lucrative Permian shale oil basin.

"We have seen more all-stock deals recently. The financing markets are not yet fully available to support large all-cash transactions. Also, given where we are in the economic cycle, management teams are reluctant to leverage up to do a big deal," said Mark McMaster, global head of M&A at Lazard.

Companies braved a tough antitrust environment to pursue large deals, increasingly backing themselves to win in court against regulatory challenges. JPMorgan's co-head of EMEA M&A, Dwayne Lysaght, said companies have to be willing to wait 18 months or longer for transactions to close, adding that the time it takes to complete deals has risen significantly.

"Tech is the sector that's the most scrutinized by regulators, and yet tech seems to be materially back and is right at the forefront of deal activity. So that just tells you that the current regulatory issues certainly aren't going to be a headwind to broader M&A activity," said Raul Gutierrez, head of M&A at Truist Securities.

Bankers also expect a pickup in cross-border deals, as cash-flush buyers hunt for transformative acquisitions. Cross-border volumes rose 17% to $171.7 billion during the quarter.

"Corporates remain cautious on the growth prospects for China and Asia more broadly and there is a lot of thinking around hedging against that. We will potentially see more deals from Europe into the US, some of which will be defensive," said Jan Weber, head of EMEA M&A at Morgan Stanley.

There are many known phishing attacks that target users of Apple devices to gain access to their Apple ID. However, a new “elaborate” attack uses a bug in the Apple ID password reset feature with “push bombing” or “MFA fatigue” techniques to flood Apple devices with password reset requests.

New phishing attack tries to convince users to reset their Apple ID password

As reported by Krebs on Security, entrepreneur Parth Patel was one of the victims of the new sophisticated phishing attack. Patel explained in a post on X that his iPhone and other Apple devices suddenly “started blowing up with Reset Password notifications.” However, since this is a system-level alert, it becomes impossible to use the device until you interact with it.

According to Patel, he was prompted by more than 100 requests to reset his Apple ID password. But the attack didn’t stop there. About 15 minutes later, the user received a call from someone spoofing the official Apple Support phone number.

“I was obviously still on guard, so I asked them to validate a ton of information about me, before answering any of their questions,” Patel said. To gain the victim’s trust, the person pretending to work for Apple Support shared multiple correct personal details, such as email, phone number, and current billing address.

Luckily, Patel was able to confirm that the call was a scam after asking the person to confirm his name. “I was tipped off that they used my data from People Data Labs in real time to validate a ton of information. Despite correctly stating all of my data, the phishers thought my name was Anthony S.”

For those unfamiliar, People Data Labs is a platform that collects and sells personal data. The platform was the target of a huge leak in 2019 that exposed around 1.2 billion records.

Never share your password reset code with others

What the attackers want is to convince the victims that something is wrong and that they need to share the code sent by Apple to reset their password. Of course, if the victim shares this code with someone else, that person can gain full access to the Apple ID.

Krebs on Security spoke to other Apple device users who were also targeted by the same phishing attack. In all cases, they were spammed with prompts to reset their Apple ID password and then received a call from fake Apple Support minutes or days later. It’s worth noting that Apple never calls users unless requested by the users themselves on its website or app.

Apple is yet to comment on the matter or release an update that prevents attackers from sending multiple password reset requests. For now, the best way to prevent attacks like this is to never share the code to reset your Apple ID password with other people.

MOSCOW, March 28 (Reuters) - Russia has no designs on any NATO country and will not attack Poland, the Baltic states or the Czech Republic but if the West supplies F-16 fighters to Ukraine then they will be shot down by Russian forces, President Vladimir Putin said late on Wednesday.

Russia's invasion of Ukraine in February 2022 has triggered the deepest crisis in Russia's relations with the West since the 1962 Cuban Missile Crisis.

Speaking to Russian air force pilots, Putin said the U.S.-led military alliance had expanded eastwards towards Russia since the 1991 fall of the Soviet Union but that Moscow had no plans to attack a NATO state.

"We have no aggressive intentions towards these states," Putin said, according to a Kremlin transcript released on Thursday.

"The idea that we will attack some other country - Poland, the Baltic States, and the Czechs are also being scared - is complete nonsense. It's just drivel."

The Kremlin, which accuses the U.S. of fighting against Russia by supporting Ukraine with money, weapons and intelligence, says relations with Washington have probably never been worse.

Asked about F-16 fighters which the West has promised to send to Ukraine, Putin said such aircraft would not change the situation in Ukraine.

"If they supply F-16s, and they are talking about this and are apparently training pilots, this will not change the situation on the battlefield," Putin said.

"And we will destroy the aircraft just as we destroy today tanks, armoured vehicles and other equipment, including multiple rocket launchers."

Putin said that F-16 could also carry nuclear weapons.

"Of course, if they will be used from airfields in third countries, they become for us legitimate targets, wherever they might be located," Putin said.

Putin's remarks followed comments earlier in the day by Ukrainian Foreign Minister Dmytro Kuleba that the aircraft should arrive in Ukraine in the coming months.

Ukraine, now more than two years into a full-fledged war against Russia, has sought F-16s for many months.

Belgium, Denmark, Norway and the Netherlands are among countries which have pledged to donate F-16s. A coalition of countries has promised to help train Ukrainian pilots in their use.

Esma levies rare penalty against Scope over failures to manage conflicts of interest

German credit rating agency Scope has been fined more than €2mn by European regulators for conflict of interest breaches connected to ratings it provided to Greensill Capital, the collapsed finance group.

The European Securities and Markets Authority did not publicly name Greensill when levying the rare fine last week, but the dates of individual credit ratings and other details referenced in the €2.2mn penalty exactly match Scope’s work for the failed supply chain finance group.

Scope handed Greensill Bank, the group’s German banking unit, a strong A- credit rating in August 2019, in a report that touted the Bremen-based lender’s very high capitalisation and liquidity. While it then downgraded this rating to BBB+ in October 2020, this still put Greensill Bank safely into investment grade territory.

Greensill Bank collapsed less than six months later and German prosecutors opened a criminal investigation into the bank’s management. Days after the collapse in March 2021, Scope downgraded the bank to junk and withdrew its credit rating.

While the bulk of Greensill Bank’s €3.5bn deposits were covered by an insurance scheme, the collapse inflicted severe losses on a number of small towns and municipalities who had about €500mn of uninsured deposits with the bank.

Esma did not name Greensill in its judgment and declined to comment on the identity of the parties involved. Instead, the regulator in its report referenced anonymised companies “[Company A] Bank AG” and “[Company A] Capital (UK) Limited”.

The penalty was for five breaches, which detail failures in Scope’s policies and procedures to flag and address potential conflicts of interest, and point to two potential conflicts “regarding one particular individual” and an entity.

During the period Scope Group entities provided other advisory services to Greensill as well as credit ratings, such as “industry risk reports” Esma said, and it failed to flag these services when rating the credit worthiness of Greensill Bank.

The rating agency also failed to raise the potential conflict of interest involving Maurice Thompson, a former executive at Greensill.

Between 2017 and 2021, Scope was providing credit ratings and other services to Greensill while Thompson, the chair of Greensill Capital at the time, was also a shareholder in the rating agency’s parent company, Scope Group, and a member of its advisory board.

“The individual also played a role in bringing these entities as a client to Scope’s group and was paid for this by Scope’s group,” Esma said in its report, adding that the person also “had interactions with Scope’s staff involved in rating activities”.

Scope told the Financial Times that the issues raised by Esma “had no influence on individual ratings issued by Scope”.

The rating agency’s policies state that it will not issue a credit rating if a person owning more than 5 per cent in Scope is also a member of the administrative and supervisory board of the rated entity, but failed to raise any concerns over Thompson’s less than 5 per cent shareholding at the time.

Thompson resigned as Greensill’s chair in March 2021, as the group fought to stave off insolvency, and is no longer listed as a member of Scope’s supervisory board. Scope declined to answer whether Thompson was still a shareholder.

Thompson could not be reached for comment.

Rating agency fines are relatively rare in Europe, although Esma levied a record €5mn fine against Fitch Ratings in 2019 around similar conflicts of interest surrounding its rating of French grocer Casino.

Greensill was the eponymous company of Australian financier Lex Greensill, whose connections to former UK prime minister David Cameron sparked a lobbying scandal when the company collapsed. Cameron, who is now the UK’s foreign secretary after being ennobled last year, earned millions of pounds as a boardroom adviser to Greensill, but has refused to publicly confirm his total pay.

Dealmaking drought left behind as first-quarter transaction values rise 30% with European market standing out

Blockbuster deals more than doubled in the first quarter of this year, signalling a nascent recovery in the mergers and acquisitions market following a lengthy drought.

The number of takeovers worth at least $10bn jumped in the first three months of 2024 compared with the same period last year, driven by large US deals in the energy, tech and financial sectors, according to data from the London Stock Exchange Group.

Eleven such transactions, with a total value of $215bn, were struck during the quarter, up from five takeovers worth a combined $100bn in the first three months of 2023.

“Mega-deals are thriving,” said Tyler Dickson, Citi’s head of investment banking, with companies “capitalising on the market conditions to accelerate growth”.

The overall value of global M&A climbed 30 per cent to $690bn, the data showed, even as the total number of deals announced fell 31 per cent.

The rebound in dealmaking comes after M&A activity plunged to a decade-long low last year, as a frenzy of activity fuelled by rock-bottom interest rates during the Covid-19 pandemic was followed by a sharp decline in takeovers.

“We’re back to average, or back to normal,” said Andre Kelleners, Goldman Sachs head of M&A in Europe, the Middle East and Africa. “We’ve seen a real, robust rebound from exceptionally low levels this period a year ago.”

Among the largest deals struck in the quarter were Capital One’s $35bn acquisition of Discover Financial, and chip design toolmaker Synopsys’s $35bn takeover of engineering software maker Ansys.

M&A has increased in anticipation of rate cuts from central banks, which investors bet could come as early as June. That has made financing for deals easier and cheaper to obtain, while IPOs have started to return to public markets that are trading at record highs.

“It’s clearly a better environment from a transaction point of view,” said Massimiliano Ruggieri, head of Emea investment banking at Morgan Stanley. “You can definitely point to a higher level of engagement from clients, both investors and issuers, that has continued throughout the quarter.”

While the US accounted for the majority of activity in the first quarter, with its share of global takeover activity at a 35-year high, dealmaking in Europe recovered particularly sharply. The value of European deals climbed 60 per cent from a year earlier to $127bn.

However, Asia-Pacific deals fell 28 per cent, to $90bn.

Bankers said sentiment in the market still remained cautious, with room for a pick-up in activity among private equity investors in particular. Buyout groups sit on a record number of assets, and face pressure to sell some of their portfolio companies and return capital to their backers.

“There’s a lot of volatility with a lot of fits and starts in the pace of activity,” said Stephan Feldgoise, global co-head of M&A at Goldman Sachs. “It’s a mixed-signal market. You have this extraordinary equity market performance but also some red flags, particularly when it comes to more economically sensitive consumers.”

However, a lag between when transactions are announced and when they close means that bankers must still wait for fees to rebound.

LSEG estimated that $24.2bn in investment banking fees overall have been earned so far this year, down 1 per cent on the same time last year. M&A fees recorded the steepest fall, dropping 14 per cent to $6.4bn, their lowest level since 2016.

JPMorgan held the top spot globally for M&A advice, followed by Goldman Sachs and Morgan Stanley.

Automakers are becoming more conscious of where they get certain parts and where those vehicles can be sold, to avoid sanctions

BEIJING—The rise of electric vehicles is dividing the global auto market into two: one that welcomes China-made cars, and the other that effectively rejects them.

Last spring, a group of Nissan executives huddled at the company’s headquarters in Yokohama, Japan, staring at a world map.

The map color-coded the world in four: red, for countries that block vehicle exports from China; yellow, for countries that risk halting them in the future; gray, for countries that might place some restrictions in the future; and green, for countries without restrictions or such likelihood.

The exercise was designed to find out whether Nissan had a shot at exporting cars it made in China, including electric vehicles, even as geopolitical tensions grow. The executives found that roughly 60% of the countries fell under what the company assessed as “green” or “gray.” Including the “yellow” countries, the tally was higher.

“When you look at the map, you can see that 80% of the market has an environment in which it could accept” China-made cars, said Masashi Matsuyama, who heads Nissan’s China investment unit. Nissan declined to say which countries fell under which color category.

Nissan decided to give its export plan a go. In November, the automaker said it would start shipping vehicles from China in 2025, including electric and plug-in hybrids—though it has yet to disclose the exact destinations of those cars.

Nissan is in good company: Ford, Tesla and BYD have all been increasing exports from China. Their moves underscore how geopolitics is reshaping the car industry, driving carmakers to update their strategies for where they make and sell cars.

The schism in the global auto sector follows similar splits in areas such as the telecom industry and the internet as the world becomes increasingly polarized around the top two economic powers.

More global carmakers are considering increasing exports from China—where cars, and especially EVs, are typically cheaper to make—but only to select destinations. Few are likely to end up on the U.S. market, but places such as Southeast Asia and the Middle East are rapidly growing markets.

Wary of sanctions

Meanwhile, Chinese carmakers are setting up factories in Europe—where they face an antisubsidy probe—and in Mexico, possibly to export into markets such as the U.S. from there and get around some tariffs.

Global and Chinese carmakers are also becoming more cautious about where they get certain technologies and components, and which markets those cars with such technology and parts can end up in, to avoid getting hit by sanctions or restrictions in the future.

Volkswagen, the biggest foreign carmaker in China, plans to keep certain China-developed technology, such as chips and software linked to autonomous driving, in China to limit the fallout from geopolitical tensions. It recently had to halt imports to the U.S. of thousands of luxury cars containing a sanctioned Chinese part.

In China this year, officials urged major Chinese automakers to source more chips from domestic suppliers, according to people familiar with the matter.

For consumers, a gap could emerge between two blocs: one region that is increasingly dominated by lower-cost, advanced-technology EVs made in China, and the other region, likely including the U.S., with more expensive cars and a slower adoption of EVs.

“It’s unlikely that new technology will scale at the same pace in mature markets like the U.S.A., which will become increasingly isolated, and new technology will only be dispensed at premium prices,” said Bill Russo, chief executive of Automobility, a Shanghai-based strategy firm.

China as Asia’s Detroit

In the U.S., as demand for electric vehicles loses momentum, some auto companies have been delaying plans for EV spending. In China, the world’s biggest EV market, many companies are still investing heavily even as the market becomes crowded and many manufacturers operate at a loss.

Industry executives say China’s electric transformation is on course given that EVs and other battery-powered vehicles already account for one-third of sales, even though sales growth has been slowing. China is pushing its carmakers and parts suppliers to go global as well as export more.

Fears of the world being flooded with less costly Chinese imports are growing in some regions. Last year, China surpassed Japan to become the biggest automotive exporter, shipping some five million vehicles overseas. The biggest destinations included Mexico, Australia and Saudi Arabia.

Chinese cars are rarely seen in the U.S., given the U.S. already levies an additional 25% tariff on vehicles imported from China. In February, President Biden ordered the Commerce Department to open an investigation into foreign-made software in cars, an effort to halt Chinese EVs from flooding the U.S. market.

Europe was the biggest recipient of China-made electric vehicles in 2023, accounting for about 40% of the $34 billion exported, data from the Atlantic Council showed. The European Union last year launched an antisubsidy investigation into China’s electric-vehicle makers. In early March, the European Commission said it found sufficient evidence that vehicles were subsidized, and was taking steps to prepare for tariffs to be applied retroactively.

China has called the European probe protectionist, while it has called on the U.S. to stop discriminating against Chinese companies.

Many of China’s top exporters are homegrown companies such as Chery Automobile and BYD, which has overtaken Tesla as the world’s top EV seller and has ambitious plans to increase exports.

Global carmakers want to position their China plants as export hubs, too, given China’s proximity to markets such as Southeast Asia and the Middle East.

Tesla has been exporting its Shanghai-made cars to regions including the Asia-Pacific. It shipped about 344,000 vehicles overseas last year, up 27% from a year earlier, data from the China Passenger Car Association showed. Ford, which has been grappling with declining sales in China, is targeting Southeast Asia and the Americas. It said it exported more than 100,000 vehicles from China last year.

In Thailand, the market share of the traditionally dominant Japanese carmakers including Toyota and Nissan fell to 78% in 2023 from 85% a year earlier, as Chinese brands swept up most of the electric-vehicle sales, data released by Toyota Thailand showed.

From the perspective of consumers around the world, China’s carmaking technology is strong enough to be accepted globally, said Nissan’s Matsuyama. “We want to utilize that for our global strategy,” he said.