M&A activity in September 2016 rebounded across most metrics as compared to August 2016, both in the U.S. and globally. In the U.S., total deal volume increased by 18.9% to $129.08 billion and average deal value increased by 24.7% to $448.2 million, despite a 1.5% decrease in the total number of deals to 717. The global market also fared well, increasing by approximately 37.8% in total deal volume to $306.36 billion and approximately 50.6% in average deal value to $208.8 million, even though the total number of deals declined 7.1% to a 12-month low of 2,734, which equated to a 7.1% decline. This rebound was driven primarily by strategic activity.

In the U.S., strategic deal volume increased by 60.8% to $115.18 billion, average deal value increased by 60.1% to $444.7 million, and the number of deals increased by 2.2% to 591. Globally, strategic volume increased by 53.3% to $263.58 and strategic average deal value increased by 66.3% to $191.8 million, but the total number of strategic transactions decreased by 9.3% to 2,438. In contrast, U.S. sponsor-related deal volume decreased by 62.4% to $13.90 billion, average deal size decreased 42.9% to $479.2 million and the total number of deals decreased by 16.0% to 126. Global sponsor-related volume decreased by 15.1% to $42.78 billion, average deal size increased 3.2% to $460.1 million and the total number of deals declined slightly by 0.3% to 296. Figure 1 and Annex Figures 1A-4A.

Crossborder activity was strong in September 2016, with the U.S. and global markets experiencing dramatic increases across several metrics. Inbound U.S. deal volume increased by 153.4% to $67.87 billion, while the number of deals increased by 13.8% to 132. Outbound U.S deal volume increased by 100.3% to $20.27 billion, even though the number of deals decreased by 25.6% to 99. Globally, both total deal volume and average deal value for crossborder deals increased by 116.6% to $134.57 billion and by 131.9% to $399.3 million, respectively, but the number of deals declined by 6.3% to 668, reaching a new 12-month low. Figure 1 and Annex Figures 5A-7A. Canada maintained its position as the leading country of origin for inbound U.S. activity in terms of deal volume (both in September 2016 ($47.72 billion) and for the last 12 months ($118.75 billion)), and number of deals (in September 2016 (41 deals) and in the last 12 months (423 deals)). Canada also continued as the leader in number of outbound deals, both in September 2016 (24) and in the last 12 months (332). The U.K. regained the lead for monthly outbound U.S activity by volume ($9.27 billion), and the U.K. maintained its 12-month lead for outbound U.S. activity by volume ($68.95 billion). Figure 3.

Utility & Energy took over as the most active target industry by deal volume in the U.S. in September 2016 ($49.31 billion), boosted by Enbridge, Inc.’s $28.29 billion offer for Spectra Energy Corp (the largest U.S. public merger in September 2016). Computers & Electronics continued in its position as the most active target industry by number of deals for the month (203), and held onto its position of most active target industry for the last 12 months, as measured by both volume ($367.29 billion) and number of deals (2,570). Figure 2.

In September 2016, the average value of U.S public mergers rebounded from a 12-month low to $8.10 billion. Figure 4. Average reverse break fees as a percentage of equity value matched a 12-month high of 5.9%. Figure 6. The incidence of tender offers as a percentage of U.S. public mergers increased to 31.3%, which is well above its 12-month average of 22.7%, however, the incidence of hostile offers remained low (5.6% of U.S public mergers, as compared to its 12-month average of 15.5%). Figures 11 and 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 (October 2016),” dated October 14, 2016, and available here.