Paul Weiss Offers M&A at a Glance for April 2019

M&A activity in the U.S. and globally generally fell in the month of April. The number of U.S. deals decreased by 15.6%, to 622, and the number of global deals decreased by 10.3%, to 2,530. However, the total value of U.S. deals[1] increased by 58.1%, to $186.69 billion, largely due to the announcement of a few megadeals. Similarly, the total value of global deals decreased by 7.0%, to $317.15 billion. In terms of the average value of announced public mergers, it increased in the U.S. by 87.4%, to $300.15 million, and globally by 3.6%, to $125.35 million. Figure 4.

Strategic vs. Sponsor Activity

Reflecting the foregoing trends, the number of strategic deals decreased in the U.S. by 9.3% to 529 and globally by 8.1% to 2,276, while strategic deal volume as measured by dollar value increased in the U.S. by 72.7% to $158.34 billion, and decreased globally by 11.3% to $246.17 billion. Figure 1 and Annex Figures 1A4A. Sponsor-related volume by dollar value increased by 7.4% to $28.36 billion in the U.S. and by 11.7% to $70.98 billion globally. However, the number of sponsor-related deals decreased in April 2019 by 39.6% to 93 in the U.S. and by 26.4% to 254 globally, representing the lowest number of sponsor-related deals in the U.S. and globally in the past 12 months. Figure 1 and Annex Figures 1A4A.

Crossborder Activity

Crossborder deal volume by dollar value decreased by 40.5% to $62.82 billion, and the number of crossborder deals decreased globally by 19.4% to 528, the lowest number of crossborder deals in the past 12-month period. In the U.S., both inbound and outbound activity as measured by dollar value decreased by 23.2% to $16.75 billion and by 81.0% to $4.49 billion, respectively. Similarly, the number of U.S. inbound and outbound crossborder deals decreased in April by 11.9% to 89 and 26.3% to 84, respectively, each of which were the lowest number of deals for such activity in the last 12-month period. Figure 1 and Annex Figures 5A7A.

France was the leading country for U.S. inbound activity by total dollar value ($4.40 billion) in April, while Canada remained the leading country for U.S. inbound activity by total dollar value ($85.35 billion) over the last 12-month period. In both April and over the last 12-month period, Canada was the leading country for U.S. inbound activity by number of deals (19 and 319, respectively). The U.K. remained the leading country of destination for U.S. outbound activity in both April and over the last 12 months by both activity as measured by dollar value ($1.10 billion and $33.12 billion, respectively) and by number of deals (21 and 292, respectively). Figure 3.

U.S. Deals by Industry

Oil and Gas was the most active target industry by dollar value in April ($111.93 billion), driven primarily by the bids for Anadarko Petroleum from Chevron and Occidental Petroleum, but Computer and Electronics remained the most active target industry over the last 12 months by dollar value ($377.24 billion) and number of deals (2,326). Computers and Electronics was also the most active target industry by number of deals in April (260). Figure 2.

U.S. Public Mergers

As for U.S. public merger deal terms in April 2019, average target break fees were below their 12-month levels (at 3.4% compared to 3.7%), and reverse break fees were below their 12-month levels (at 5.5% compared to 5.8%). Two deals were announced with a go-shop provision. Figures 6, 7 and 8. Cash transactions comprised 70.0% of U.S. public mergers, well above the 51.4% 12-month average, and 10% of deals were choice-election transactions. Figure 9. Further, hostile and unsolicited transactions represented 20.0% of announced U.S. public mergers, above the 14.2% 12-month average. Figure 12.

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 — May 2019,” dated May 15, 2019, and available here.