54 Acquisition International - January 2017 At first glance 2016 may appear to have been fairly disappointing in terms of the volume and value of mergers and acquisitions (M&A) deals signed off over the 12 months. However, given that 2015 was a record-breaking year, it was always going to be difficult for dealmaking to keep up such a blistering pace. The year’s results are also down to a lesser extent on 2014, but compare much more favourably with preceding 12 month periods. he year started fairly slowly as USD 2,146,354 million was injected across 51,008 deals between the beginning of January and the end of June, according to Zephyr, the M&A database published by Bureau van Dijk. Value increased in the second half of 2016, despite a decline in volume over the six months; between July and December there were 46,950 transactions worth a combined USD 2,606,413 million. The increase in value despite numbers dropping can be attributed to a number of deals with very high values. In fact, the year’s largest transaction accounted for almost 5 per cent of all value invested worldwide in H2. This was Anheuser-Busch InBev’s purchase of UK beer maker SABMiller for USD 124,444 million through its Newbelco vehicle in a transaction which closed in October. That was closely followed by another mega deal as AT&T agreed to pick up US media and entertainment conglomerate Time Warner for USD 108,700 million in October. Completion of that deal is slated to close by the end of 2017. These deals significantly boosted aggregate value and although 2016 did not match 2014 or 2015 in this respect, the USD 4,752,767 million injected is still higher than for any other 12-month period between 2008 and 2013. In terms of sectors, the machinery, equipment, furniture and recycling industry attracted the most investment in 2016, having been targeted in deals worth a combined USD 661,292 million, placing it well ahead of its nearest competitor, the chemicals, rubber and plastics field, which notched up USD 487,568 million. Other sectors which performed well include the primary sector (USD 268,896 million), gas, water and electricity (USD 249,467 million) and food, beverages and tobacco (USD 234,973 million). The latter two actually bucked the trend for 2016 by improving on 2015’s result, as did a few other industries, including metals and metal products (USD 157,380 million) and hotels and restaurants (USD 65,955 million). 2016’s results are also encouraging when evaluated on a quarterly basis. Although every quarter was down on its counterpart in 2015, the year’s four quarters all improved on each other, climbing gradually from USD 1,042,975 million in Q1 to USD 1,309,122 million in Q4. Interestingly, the exact opposite trend was evident by volume as figures slipped every quarter; falling from a year high of 26,293 deals in Q1 to USD 22,922 in Q4. This once again highlights the impact which individual high value transactions have on the overall performance of a quarter, or a year. In fact, the year’s top ten deals by value were all worth in excess of USD 28,000 million. The SABMiller which proved to be the largest of 2016 is also one of the largest on record, according to Zephyr. The database shows that only four other transactions have been larger. The most recent of these four deals was announced in 2013, when Verizon Communications bought the remaining 45 per cent stake it did not already own in US mobile telecoms player Verizon Wireless from Vodafone for USD 130,000 million. That deal accounted for some 4 per cent of total investment for 2013. To sum up, although 2016 has not broken any records in terms of either deal volume or value, the results are far from disastrous. The year compares favourably with other recent 12 month periods and may be a small blip caused by dealmakers taking a breather after spending so freely throughout 2015. Company: Bureau van Dijk E-Mail:
[email protected] Web: www.bvdinfo.com Round-up of 2016 T