Paul Weiss Offers M&A at a Glance for July 2017

Global and U.S. M&A activity in July 2017 increased in total deal value, despite a decline in the number of deals. Globally, total deal volume by dollar value increased by 14.6% to $303.85 billion, while the number of deals decreased by 8.9% to 3,029. Similarly, in the U.S., total deal volume by dollar value increased by 13.1% to $108.99 billion, while the number of deals decreased by 9.6% to a 12-month low of 644.

Strategic vs. Sponsor Activity

Strategic activity drove the market, with strategic deal volume, as measured by dollar value, increasing by 14.8% to $213.90 billion globally and by 39.6% to $78.11 billion in the U.S., despite declines in the number of deals by 10.4% to 2,730 globally and by 13.3% to 530 in the U.S. Figure 1 and Annex Figures 1A-4A. Sponsor-related activity was mixed in July 2017. Such deal volume, as measured by dollar value, increased globally (by 14.0% to $89.96 billion) and decreased in the U.S. (by 23.6% to $30.89 billion), whereas the number of deals increased both globally and in the U.S. (by 7.6% to 299 and by 12.9% to 114, respectively).

Crossborder Activity

Crossborder activity mirrored overall market trends. Global crossborder activity increased in total dollar value (by 47.4% to $113.59 billion) and decreased in number of deals (by 2.4% to 802). In the U.S., inbound and outbound activity increased in total dollar value (by 47.2% to $19.63 billion and by 81.4% to $24.44 billion, respectively) and decreased in number of deals (by 17.4% to 109 and by 22.0% to 117, respectively). Figure 1 and Annex Figures 5A-7A.

In U.S. outbound activity for July, the United Kingdom was the most active country in both total dollar value ($15.05 billion) and number of deals (28). The U.K. regained its position as the leader in outbound activity over the last 12 months, as measured by total dollar value ($65.44 billion), and remained the leader in number of deals (322) over the same period. As for U.S. inbound activity by dollar value, Canada was the lead country of origin for the month of July ($8.34 billion), with the U.K. retaining the lead over the last 12 months ($106.54 billion). Canada and Japan tied as the lead countries of origin for the number of inbound U.S. deals in July (20 each), while Canada leads in number of inbound U.S. deals over the last 12 months (399). Figure 3.

U.S. Deals by Industry

Telecommunications was the most active target industry in the U.S. by dollar value in July ($24.83 billion), followed closely by Utility & Energy ($24.57 billion). Computers & Electronics remained the most active target industry in the U.S. by number of deals in July (170) and over the last 12 months (2,576). Notably, Oil & Gas ($195.44 billion over the last 12 months) displaced Computers & Electronics ($184.89 billion over the same period) as the most active target industry in the U.S., as measured by dollar value, marking a shift in this metric from August 2016, when Computers & Electronics peaked at $379.24 billion. Figures 2 and 5.

U.S. Public Mergers

Turning to U.S. public merger terms in July 2017, average target and reverse break fees remained near their 12-month averages, and were 3.4% and 6.0%, respectively. Figures 6 and 7. The use of cash consideration in July 2017 (65.0%) was near its 12-month average (61.9%). Figure 9. The incidence of tender offers as a percentage of U.S. public mergers (30.0%) was above the 12-month
average (20.6%). Figure 11. Finally, hostile offers in July 2017 remained lower than the 12-month average (4.8% and 9.0%, respectively). Figure 12.

The figures referenced above are all available here.

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 (August 2017),” dated August, 15 2017, and available here.