There must be something in the water: three big deals have failed to materialise. HSBC has withdrawn its £5bn plan to buy Nedbank; Sinochem will not bid against BHP Billiton’s already toppish $39bn offer for PotashCorp; and rigor mortis has set in on BHP Billiton’s proposed iron ore joint venture with Rio Tinto. Each story is different.
Many stories, but one common theme: economic caution. HSBC did not want to take its chances in South Africa; no one wanted to test Chinese intentions; and there was little appetite for a huge joint venture in an already concentrated sector. It is still far too early for deals that ignore precedents or test limits.