M&A activity in January 2017 showed mixed results, with the global M&A market generally down and the U.S. M&A market generally up. Total deal volume as measured by dollar value decreased globally by 26.9% to $280.97 billion, but increased in the U.S. by 36.0% to $108.11 billion. The number of deals followed similar trends, decreasing globally by 0.4% to 2,832 and increasing in the U.S. by 21.6% to 789.
Globally, both strategic and sponsor-related M&A activities were down, with deal volume, as measured by dollar value, decreasing by 22.4% to $235.77 billion and 43.9% to $45.20 billion, respectively. The number of deals decreased for strategic transactions globally, falling by 2.1% to 2,544, but increased by 18.0% to 288 for sponsor-related deals. In the U.S., both strategic and sponsor-related activities were up, although strategic made a much stronger showing. U.S. strategic M&A as measured by dollar value increased in the U.S. by 56.2% to $77.25 billion, while sponsor-related M&A increased by a mere 2.7% to $30.86 billion. As measured by the number of deals, U.S. strategic transactions increased by 18.2% to 669 and sponsor-related transactions also increased by 44.6% to 120, respectively). Figure 1 and Annex Figures 1A-4A.
Crossborder deal volume, as measured by dollar value, in January showed similarly mixed results. Global crossborder activity, as measured by dollar value, decreased by 43.1% to $114.19 billion. Outbound U.S. activity decreased by 50.4% to $40.01 billion, and inbound U.S. activity decreased as well by 14.3% to $20.58 billion. The number of crossborder transactions remained relatively flat globally, however, the U.S. saw an increase in the number of crossborder transactions (increasing by 34.5% to 152 for outbound U.S. activity and by 12.0% to 121 for inbound U.S. activity). Figure 1 and Annex Figures 5A-7A. Switzerland claimed the lead for monthly outbound U.S. activity by volume in January 2017 ($31.42 billion) and the U.K. maintained the top spot as the 12-month leader ($65.99 billion). As for U.S. inbound activity, Canada was the leading country of origin in deal volume ($7.12 billion) and number of deals (30) in January 2017, and maintained its 12-month lead ($108.20 billion and 404 deals). Figures 3 and 5.
Oil & Gas was the most active target industry by deal volume, as measured by dollar value, in the U.S. in January 2017, at $32.45 billion. Computers & Electronics was the most active target industry by number of deals in the U.S. in January 2017 (211 deals) and maintained its position as the most active target industry for the last 12 months, as measured by both volume ($298.58 billion) and number of deals (2,457). Figure 2.
With respect to U.S. public mergers, average deal value increased to $1.82 billion. Figure 6. Target break fees remained near their 12-month average at 3.6%, while reverse break fees reached a 12-month high at 9.1%. Figures 6 and 7. The use of cash consideration in January 2017 (58.8%) remained close to its 12-month average (64.2%). Figure 9. The incidence of tender offers as a percentage of U.S. public mergers (29.4%) was above its 12-month average (22.3%). Figure 11. Finally, the percentage of hostile offers as a percentage of U.S. public mergers (15.0%) was also above its 12-month average (12.3 %). Figure 12.
The figures reference above are all available here.
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This post comes to us from Paul, Weiss, Rifkind, Wharton & Garrison LLP. It is based on the firm’s memorandum, “M&A at a Glance (February 2017),” dated February 15, 2017, and available here.