M&A activity in the U.S. and globally for the month of May was generally consistent with April levels. The most notable changes in May were an increase in the number of sponsor-related deals by almost 75% to 187 in the U.S. and by almost 40% to 404 globally.  The number of U.S. deals increased by 2.7%, to 760, while the number of global deals decreased by 5.2%, to 2,644. The total value of U.S. deals[1] decreased slightly by 1.1%, to $138.88 billion, and the total value of global deals increased by 4.5%, to $287.57 billion. Average value of announced public mergers decreased in the U.S. by 3.7%, to $182.73 million, but increased globally by 10.2%, to $108.76 million.[2] Figure 4.

Strategic vs. Sponsor Activity

The number of strategic deals decreased in the U.S. by 9.3% to 573 and globally by 10.3% to 2,240. Figure 1 and Annex Figures 1A—4A. Strategic deal volume as measured by dollar value decreased in the U.S. by 39.5% to $67.69 billion and globally by 14.7% to $173.25 billion. The number of sponsor-related deals increased in May 2019 by 73.1% to 187 in the U.S. and by 39.3% to 404 globally, respectively representing the highest number of sponsor-related deals in the U.S. and second-highest globally in the past 12 months. Sponsor-related volume by dollar value increased significantly by 150.0% to $71.19 billion in the U.S. and by 58.9% to $114.32 billion globally. Figure 1 and Annex Figures 1A—4A.

Crossborder Activity

Crossborder deal volume by dollar value increased by 5.5% to $69.03 billion, and the number of crossborder deals increased globally by 4.3% to 601. The number of U.S. inbound crossborder deals decreased in May by 3.8% to 101, while the number of U.S. outbound crossborder deals increased by 11.5% to 97. Similarly,  U.S. inbound activity as measured by dollar value decreased by 30.3% to $11.62 billion, while U.S. outbound activity as measured by dollar value increased by 94.7% to $9.48 billion. Figure 1 and Annex Figures 5A—7A.

Canada was the leading country for U.S. inbound activity in May and over the last 12-month period by total dollar value ($2.15 billion and $71.08 billion, respectively) and number of deals (27 and 327, respectively). The U.K. remained the leading country of destination for U.S. outbound activity in both May and over the last 12 months by activity as measured by dollar value ($3.11 billion and $35.31 billion, respectively) and number of deals (19 and 281, respectively). Figure_3.

U.S. Deals by Industry

Computers and Electronics was the most active target industry in May and over the last 12 months by dollar value ($42.83 billion and $395.93 billion, respectively) and number of deals (299 and 2,423, respectively). Figure 2.

U.S. Public Mergers

As for U.S. public merger deal terms in May 2019, average target break fees were below their 12-month levels (at 3.0% compared to 3.5%), and reverse break fees were below their 12-month levels (at 4.8% compared to 5.7%). One deal was announced with a go-shop provision. Figures 6, 7 and 8. Cash transactions comprised 60.0% of U.S. public mergers, above the 50.3% 12-month average, and no deals were choice-election transactions. Figure 9. Further, hostile and unsolicited transactions represented 16.7% of announced U.S. public mergers, above the 14.4% 12-month average. Figure 12.

All Figures referenced above are available here.

ENDNOTES

[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.

[2] We would like to announce our new partnership with Deal Point Data, which will be the source of our data on U.S. public mergers on a going forward basis.

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 — June 2019,” dated June 17, 2019, and available here.