Paul Weiss Offers M&A at a Glance for November 2018

With the exception of sponsor-related transactions, M&A activity in November 2018 generally declined. Deal volume by dollar value[1] decreased, by 9.1% to $141.10 billion in the U.S., and by 21.4% to $254.76 billion globally. The number of deals also decreased, by 11.1% to 431 in the U.S. and by 12.8% to 2,272 globally, hitting the lowest levels for number of deals both in the U.S. and globally in the history of this publication.

Strategic vs. Sponsor Activity

In line with October, the sponsor M&A market performed better than strategic deals. The number of strategic deals decreased in November 2018 by 19.2% to 291 in the U.S. and by 14.9% to 1,971 globally. Additionally, strategic volume by dollar value decreased by 27.2% to $78.64 billion in the U.S. and by 30.6% to $163.94 billion, globally. Figure 1 and Annex Figures 1A4A. The number of sponsor-related deals, in contrast, increased in the U.S. by 12.0% to 140 and globally by 3.8% to 301, and sponsor-related deal volume as measured by dollar value increased in the U.S. by 32.6% to $62.46 billion and globally by 3.6% to $90.82 billion. Figure 1 and Annex Figures 1A—4A.

Crossborder Activity

Globally, the number of crossborder deals decreased by 24.0% to 519 while crossborder deal volume by dollar value increased by 5.0% to $91.75 billion.

In the U.S., the number of crossborder deals decreased in November 2018. U.S. inbound transactions decreased by 17.4% to 71 (among the lowest levels in the last five years), and U.S. outbound transactions decreased by 9.1% to 100 (the second lowest levels for such activity in the last 12-month period). U.S. crossborder activity as measured by dollar value increased, with inbound volume by dollar value increasing significantly by 138.5% to $47.03 billion (the highest level in the last 12-month period) and U.S. outbound volume by dollar value increasing by 47.5% to $10.06 billion. Figure 1 and Annex Figures 5A—7A.

Canada retained its lead for U.S. inbound activity by number of deals in the month of November (24) and over the last 12-month period (326). In addition, Canada was the leading country for U.S. inbound activity as measured by total dollar value in November ($24.55 billion) and retained its lead over the last 12-month period ($81.45 billion). The U.K. was again the leading destination country for U.S. outbound transactions by number of deals in November (18) and over the last 12-month period (296). The U.K. was also the leading destination country for U.S. outbound activity by dollar value in November ($5.17 billion) and retained its lead over the last 12-month period ($94.41 billion). Figure 3. While U.S./U.K. M&A activity has remained significant in the last 12-months, it remains to be seen whether this trend continues in light of ongoing uncertainty surrounding Brexit.

U.S. Deals by Industry

Computers & Electronics remained the most active target industry by number of deals in November (105) and over the last 12 months (2,255). Computers & Electronics was also the most active target industry by dollar value in November ($36.65 billion), as well as over the last 12 months ($331.66 billion). Figure 2.

U.S. Public Mergers

As for U.S. public merger deal terms in November 2018, average target break fees and average reverse break fees were both above their 12-month levels. Average target break fees were 4.4% (compared to a 12-month average of 3.9%), and average reverse break fees were 7.2% (compared to a 12-month average of 5.9%). Figures 6 and 7.

All Figures referenced above are available here.

ENDNOTE

[1]    Each metric in this publication that references deal volume by dollar value is calculated from the subset of the total number of deals that includes a disclosed deal value.

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–December 2018,”dated December 17, 2018, and available here.

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