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Komfie Manalo, Opalesque Asia:

So-called 'arb’ traders, or hedge fund managers who focus on merger arbitrage strategy, are feeling pressure as corporate merger deals are collapsing left and right, unlike in 2015 when the amount spent on mergers totaled $4.7tln, reported the New York Times.

In contrast, an estimated $400bn in supposed corporate mergers have been withdrawn in the United States alone since January, tripling the previous record set in 2007 during the same period.

The latest corporate merger to collapse is the $6.3bn deal between retailers Staples and Office Depot. A week before, the $35bn mega merger between oil services companies Halliburton and Baker Hughes broke down. And last month, hedge funds were heartbroken when the proposed $152bn merger between drug giants Pfizer and Allergan was called off because of regulatory concerns.

Aly El Hamamsy, a partner in Cadwalader, Wickersham & Taft’s mergers-and-acquisitions group, commented, "You’re definitely seeing a hangover from the M.&A. party from 2015. Things will stay interesting for a few months at least."

El Hamamsy, who occasionally advises arbs described the mood in the industry as like waking up everyday and deciding whether to wear a helmet or a diaper when going to work.

Merger arbitrage was the ......................

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