M&A activity in the U.S. and worldwide continued to be mixed in November. The number of deals fell by 13.5% in the U.S., to 721, and by 7.7% globally, to 2,710. However, total deal value[1] rose by 48.3% in the U.S., to $150.98 billion, and by 8.7% globally, to $326.37 billion. Average deal value also increased by 71.6% in the U.S., to $209.4 million, and by 17.7% globally, to $120.43 million. Figure 1.

Strategic vs. Sponsor Activity

Strategic deals outperformed sponsor deals last month, with the former showing more mixed results while the latter declined across all metrics. The number of strategic deals decreased in the U.S. by 14.4% to 565 and globally by 7.8% to 2,357, but strategic deal volume as measured by dollar value increased significantly in the U.S. by 84.1% to $124.65 billion and globally by 25.2% to $268.30 billion. The number of sponsor-related deals decreased by 10.3% to 156 in the U.S. and by 6.6% to 353 globally, respectively, and sponsor-related deal volume by dollar value also decreased by 22.7% to $26.33 billion in the U.S. and by 32.5% to $58.07 billion globally. Figure 1 and Annex Figures 1A—4A.

Crossborder Activity

Crossborder activity weakened across most indicators in November. Crossborder deal volume by dollar value decreased by 33.3% to $97.01 billion, whereas the number of crossborder deals remained relatively flat globally and increased by only 0.9% to 650. U.S. inbound activity as measured by dollar value increased by 7.2% to $38.38 billion, while the number of U.S. inbound crossborder deals increased in November by 21.0% to 127. U.S. outbound activity as measured by dollar value decreased by 44.3% to $9.55 billion. The number of U.S. outbound crossborder deals also decreased by 13.4% to 110. Figure 1 and Annex Figures 5A—7A.

Switzerland was the leading country for U.S. inbound activity in November by total dollar value ($15.71 billion), driven largely by the announced $10.3 billion proposed acquisition of Medicines Co by Novartis AG, while Canada remained the leading country for U.S. inbound activity in November by number of deals (34). Canada was the leading country for U.S. inbound activity by deal value ($41.71 billion) and by number of deals over the last 12-month period (331 deals). The U.K. was the leading country of destination for U.S. outbound activity in November by total dollar value ($2.21 billion). Canada was again the leading country of destination for U.S. outbound activity over the last 12 months as measured by dollar value ($29.56 billion), whereas the U.K. was the leading country of destination for U.S. outbound activity in November by number of deals (19) and over the last 12 months (270). Figure 3.

U.S. Deals by Industry

Computers and Electronics was the most active target industry in November and over the last 12 months by number of deals (269 and 3,253, respectively) and by dollar value ($60.66 billion and $435.20 billion, respectively). Figure 2.

U.S. Public Mergers

As for U.S. public merger deal terms in November 2019, average target break fees remained close to their 12-month levels (at 3.5% compared to 3.6%). Average reverse break fees were, however, above their 12-month levels (at 6.1% compared to 5.8%). The percentage of deals containing a go-shop provision was 14.3% in November 2019, compared to the 12-month figure of 12.6%. Figures 6, 7 and 8. Cash transactions comprised 71.4% of U.S. public mergers, above the 53.8% 12-month average. Figure 9. Hostile or unsolicited transactions comprised 12.5% of U.S. public mergers in November 2019, lower than the 12-month average of 13.2% of deals. Figure 12.

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.

All Figures referenced above are available here.

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 2019,” available here.