Continuing a relatively flat year so far, M&A activity showed mixed results in September 2017, with the global market switching positions with the U.S. from last month and generally faring better. In the U.S., total deal volume, as measured by dollar value, decreased by 31.2% to $90.51 billion, while the number of deals increased by 7.8% to 927. Globally, deal volume increased by 1.5% to $289.22 billion, and the number of deals increased by 6.7% to 3,456.

Strategic vs. Sponsor Activity

In the U.S., strategic deal volume increased by 4.9% to $81.04 billion, and the number of deals increased by 12.1% to 771. Global strategic deal volume increased by 10.5% to $228.72 billion, and the number of global strategic deals increased by 6.6% to 3,092. Sponsor-related activity showed significant declines in both U.S. and global markets, with U.S. deal volume and U.S. number of deals decreasing by 82.5% to $9.47 billion (a 12-month low) and 9.3% to 156, respectively; globally, sponsor-related deal volume decreased by 22.5% to $60.50 billion and the number of deals increased by 7.4% to 364. Figure 1 and Annex Figures 1A-4A.

Crossborder Activity

Crossborder activity fared considerably better in September 2017 for both the global and U.S. markets. Globally, crossborder deal volume increased by 51.0% to $97.45 billion, and the number of deals increased by 7.6% to 805. In the U.S., inbound deal volume increased 14.7% to $16.40 billion, and the number of inbound deals increased by 21.4% to 159. U.S. outbound deal volume increased by 58.3% to $16.21 billion, and the number of U.S. outbound deals increased by 12.9% to 149. Figure 1 and Annex Figures 5A-7A.

In U.S. inbound activity, Ireland was the leading country of origin for September 2017, with $3.57 billion in deal volume, propelled by CRH plc’s proposed $3.50 billion acquisition of Ash Grove Cement Co. The U.K. retained the lead for U.S. inbound activity by dollar value over the last 12 months, with $96.09 billion in volume. Canada was the leading country of origin by number of U.S. inbound deals in September 2017, with 43 transactions, and continued as the leading country of origin for the number of U.S. inbound deals over the last 12 months, with 419 transactions. As for U.S. outbound activity, Israel led in September by total dollar value with $3.47 billion in deal volume, driven by Intel Corp’s $1.63 billion proposed acquisition of the remaining stake in Mobileye BV, and by Teva Pharmaceutical Industries Ltd.’s sale of certain pharmaceutical rights to Foundation Consumer Healthcare LLC for $0.68 billion and of The Cooper Companies, Inc. for $1.1 billion. For U.S. outbound deal volume over the last 12 months, Germany became the leader with $59.07 billion in volume. The U.K. was the leader in the number of U.S. outbound deals in both September and over the last 12 months, with 31 transactions and 320 transactions, respectively. Figure 3.

U.S. Deals by Industry

Aerospace was the most active target industry by dollar value in September 2017 ($39.84 billion) for the first time since the inception of this publication. This was driven mainly by United Technologies Corp’s proposed acquisition of Rockwell Collins Inc. ($24.50 billion). Computer & Electronics remained the most active target industry by number of deals in September (287) and over the last 12 months (2,733). Oil & Gas retained its position as the most active target industry, as measured by dollar value, over the last 12 months, with $187.96 billion in volume. Figures 2 and 5.

U.S. Public Mergers

As for U.S. public merger deal terms in September 2017, average target break fees declined to 3.3%, while average reverse break fees declined to 4.6%, below the 12-month averages of 3.5% and 5.5%, respectively. Figures 6 and 7. The use of cash consideration in September 2017 was at 80.0%, significantly above its 12-month average of 58.0%. Figure 9. The incidence of tender offers as a percentage of U.S. public mergers was 30.0%, which is above the 12-month average of 19.7%. Figure 11. Finally, the incidence of hostile offers in September 2017 was at 10.0%, similar to the 12-month average of 9.4%. Figure 12.

All Figures referenced above are available here.

This post comes to us from Paul, Weiss, Rifkind, Wharton & Garrison LLP. It is based on the firm’s recent memorandum, “M&A at a Glance, October 2017” available here.