M&A activity in September 2018 was mixed compared to August levels, but generally reflected an overall continuing downward trend starting in April of this year. Deal volume by dollar value0F decreased in the U.S. by 44.5% to $77.06 billion and globally by 16.1% to $238.25 billion. While the number of deals increased in the U.S. by 2.0% to 357 (the second lowest level since the beginning of this publication in 2012), the number of deals decreased globally by 1.5% to 2,195.
Strategic vs. Sponsor Activity
The number of strategic deals increased in September 2018 by 4.8% to 262 in the U.S. and decreased by 1.2% to 1,951 globally. Strategic volume by dollar value decreased in the U.S. by 61.8% to $43.69 billion and globally by 27.3% to $161.73 billion. Figure 1 and Annex Figures 1A—4A. The number of sponsor-related deals decreased in the U.S. by 5.0% to 95 and globally by 3.6% to 244. A relative bright spot is sponsor-related deal volume as measured by dollar value, which increased in the U.S. by 36.5% to $33.38 billion and globally by 24.7% to $76.52 billion, although on a relatively flat trajectory for the year overall. Figure 1 and Annex Figures 1A—4A.
Globally, the number of crossborder deals increased by 7.1% to 510, although, again, this figure represents the second lowest level for the last 12-month period. Global crossborder deal volume by dollar value increased by 50.8% to $92.32 billion.
In the U.S., the number of crossborder deals also increased in September 2018. U.S. inbound transactions increased by 3.1% to 66, and U.S. outbound transactions increased by 21.3% to 91, but we note that both figures represented the second lowest levels for such activity in the last 12-month period. U.S. crossborder activity as measured by dollar value was more mixed, with inbound volume by dollar value decreasing by 6.2% to $16.96 billion and U.S. outbound volume by dollar value increasing by 40.5% to $22.25 billion. Figure 1 and Annex Figures 5A—7A.
Canada led U.S. inbound activity by number of deals in the month of September (16) and continued as leader over the last 12-month period (320). Japan was the leading country for U.S. inbound activity as measured by total dollar value in September ($7.77 billion), with Canada retaining its lead over the last 12-month period ($83.16 billion). The U.K. was again the leading destination country for U.S. outbound transactions by number of deals in September (21) and over the last 12-month period (279). The U.K. was also the leading destination country for U.S. outbound activity by dollar value in September ($7.16 billion) and over the last 12-month period ($85.75 billion). Figure 3.
U.S. Deals by Industry
Computers & Electronics remained the most active target industry by number of deals in September (95) and over the last 12-month period (2,384). Computers & Electronics was also the most active target industry by dollar value in September ($17.91 billion), while Healthcare remained the most active target industry over the last 12-month period ($292.27 billion). Figure 2.
U.S. Public Mergers
As for U.S. public merger deal terms in September 2018, both average target break fees and average reverse break fees were below their 12-month averages, at 3.3% (compared to a 12-month average of 3.7%) and 4.9% (compared to a 12-month average of 5.6%), respectively. Figures 6 and 7. No transactions in September included a go-shop provision. Figure 8. The use of cash consideration in September increased to 57.1%, above the 12-month average of 53.4%. Figure 9. Tender offers for U.S. public mergers in September (14.3%) exceeded the 12-month average (13.5%) and hostile/unsolicited offers in September (15.4%) also exceeded the 12-month average (14.9%). Figures 11 and 12.
 Each metric in this publication that references deal volume by dollar value is calculated from the subset of the total number of deals that include a disclosed deal value.