BY Fraser Tennant
Global mergers & acquisitions (M&A) activity broke the $3 trillion barrier in 2017 despite continuing geopolitical uncertainty, according to a new report by Mergermarket.
In its 2017 global M&A trend report, the business intelligence and research group reveals that last year M&A investment fell just short of previous years, dipping 3.2 percent by value to $3.15 trillion (across 18,433 deals) in comparison to the $3.26 trillion by value seen in 2016 (across 18,592 deals).
“In spite of geopolitical uncertainty around the world, global M&A has remained robust – marking the fourth successive year breaching the US$ 3tn barrier”, said Jonathan Klonowski, research editor (EMEA) at Mergermarket. “The pace of M&A set in 2015 and 2016 was always going to be difficult to replicate and while politics has undoubtedly had an effect, it has not been to the levels that many had been predicting.”
The report also notes that December 2017 saw the largest monthly total of the year, with five megadeals announced in the final month, including the two largest deals of the year – The Walt Disney Company’s acquisition of Twenty-First Century Fox’s entertainment assets for $68.4bn and the $67.8bn tie up between CVS and Aetna.
Furthermore, cross-border activity has once again been a key component of M&A in 2017. As confidence wanes in several regions, dealmakers appear to be pursuing a strategy of spreading risk and over-consolidating within home markets – despite ongoing global geopolitical uncertainty.
In terms of sector activity, technology hit its highest annual deal count as investors look towards the latest developments in the industry, such as the Internet of Things (IoT), autonomous vehicles and blockchain. In addition, a surge in the consumer sector was reflected in the acquisitions of Reynolds America, Luxottica and Whole Foods, with six takeovers in the sector worth over $10bn.
“The next wave of technology is driving M&A across all sectors as people change the way they consume media, products and services”, said Mr Klonowski. “Traditional firms have had to react to new names and offerings which simply did not exist a number of years ago, while technology creeps further and further into every sector. In such a fast-paced environment, firms are looking towards a ‘buy’ mentality, rather than to ‘build’ themselves.”
Leading the financial adviser rankings, having advised on 315 deals globally worth $878.1bn, is Goldman Sachs & Co.