Global M&A activity down 18 percent in 2016 says new review

BY Fraser Tennant

The volume of global mergers & acquisitions (M&A) activity in 2016 fell 18 percent from the record high seen in 2015, according to a review published this week by Dealogic.

Moreover, the fall – from $4.66 trillion in 2015 to $3.84 trillion in 2016 – followed three consecutive year-on-year increases. And while volume fell 18 percent, M&A revenue was down by only 2 percent.

Among the key M&A trends and developments highlighted by Dealogic are: (i) cross-border M&A activity being down 3 percent globally year-on-year; (ii) China outbound volume hitting a record high of $225.4bn; (iii) US inbound M&A also hit a record high, with a total of $486.3bn; (iv) 4Q global M&A hitting the $1 trillion mark in the first week of December, the biggest quarter since 4Q 2015 and only the tenth time that quarterly volume has surpassed the trillion mark.

Looking to M&A volume in Europe, targeted M&A of $903.1bn was down 13 percent from the $1.03 trillion announced in 2015 – the lowest total since 2013 ($760.3bn). Among the notable deals in the region was the $47bn pending bid by Qualcomm for NXP Semiconductors (announced in October 2016), the biggest US acquisition of a European company on record.

Towards the end of the year (October 2016) there was a late surge in big deals, with five transactions announced worth $20bn or more. Topping the list was AT&T’s $107.9bn bid for Time Warner (announced on 22 October), the seventh largest M&A transaction on record and the biggest deal announced in 2016. In second place was Bayer’s $66.3bn acquisition of Monsanto. Overall, October 2016 saw a record monthly high of $600.8bn.  

Like 2015, technology was once again the top sector (for only the second time on record) with a total of $612.9bn in 2016, short of the record high of $691.4bn the previous year. And for the first time since 2012, healthcare M&A activity fell outside the top three, ranking fourth for global M&A volume, with $320.9bn.

Goldman Sachs led the global M&A volume ranking with $970.4bn, followed by Morgan Stanley and JPMorgan with $866.0bn and $823bn respectively. Goldman Sachs also topped the global M&A revenue ranking with a 10.1 percent wallet share.

Finally, in terms of withdrawn transactions, M&A volume of $837.3bn in 2016 was the highest since 2008 ($948.5bn), with the years seeing two of the top five $100bn-plus withdrawn deals on record. These were Pfizer’s $160bn bid for Allergan (withdrawn in April 2016) and Honeywell International’s $102.8bn bid for United Technologies (withdrawn in March 2016).

Report: Dealogic – Global M&A Review: Full Year 2016

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