54 Acquisition International - Issue 1 2018 2017 has been a fairly disappointing year in terms of the volume and value of mergers and acquisitions (M&A) deals announced over the course of the last 12 months. In all there were 89,414 deals worth a combined USD 4,261,886 million announced during the year. This is particularly disappointing as it represents the second consecutive yearly decline in value, following the impressive USD 4,818,076 million-worth of dealmaking recorded in 2015. he discouraging result comes despite a pleasing start to the year in terms of value. Both Q1 and Q2 surpassed the corresponding periods of last year, with dealmaking of USD 1,049,824 million and USD 1,060,141 million, respectively. However, both Q3 and Q4 failed to keep up this pace; Q3 dropped from USD 1,174,239 million in Q3 2016 to USD 982,304 million, while Q4’s value slipped from USD 1,338,225 million to USD 1,169,617 million over the same timeframe. By contrast, value was down in every quarter when compared with the corresponding timeframe of 2016. Despite the overall decline in volume and value in 2017, there were still a number of sizeable transactions signed off over the 12 months. The largest of these was worth USD 77,000 million and featured a US target as CVS Health agreed to pick up insurance player Aetna for USD 207.94 per share. The deal was announced in early December and accounts for almost 7 per cent of all value recorded in Q4 2017. It was followed by another US purchase as the Walt Disney Company announced plans to acquire Twenty-First Century Fox for USD 66,100 million in mid-December. Third place was taken by British American Tobacco’s USD 49,400 million takeover of cigarettes and tobacco products maker Reynolds American, which was signed off in January and subsequently closed in July. Of the year’s top ten deals by value, five featured US targets. As such, it is not surprising to see North America top the world region rankings by value. In all, companies based in the region were targeted in deals worth a combined USD 1,393,704 million in 2017. In keeping with the overall global trend for the year, this represented a decline on 2016’s USD 1,665,860 million-worth of dealmaking in the region. Nevertheless, it still placed it ahead of second- placed Western Europe, which featured in deals worth USD 1,177,527 million, while the Far East and Central Asia came third with USD 1,162,317 million. It was a different story by volume as the Far East and Central Asia topped the rankings with 25,126 deals, followed by Western Europe and North America with 24,612 and 23,383, respectively. In terms of sectors, the machinery, equipment, furniture and recycling industry attracted the most value in the year under review, having featured in deals worth a combined USD 522,196 million. This was boosted by a number of high profile transactions, including United Technologies’ USD 30,000 million acquisition of Rockwell Collins. This transaction was the fifth-largest of the year and accounted for 6 per cent of the USD 522,196 million injected into machinery, equipment, furniture and recycling companies in 2017. Other large deals in the industry include Becton Dickinson and Company’s USD 24,000 million takeover of CR Bard and Pangea’s USD 17,714 million purchase of Toshiba Memory. The chemicals, rubber and plastics field also attracted significant value in 2017, having been targeted in deals worth USD 353,597 million, while banks and the primary sector also placed highly, with USD 298,860 million and USD 253,886 million, respectively. In short, while 2017 was unable to keep up the impressive pace recorded over the previous two years, activity levels were still encouraging and plenty of high value dealmaking took place. 2017’s value surpassed any other year since 2007 and leaves plenty to be positive about as we move into 2018. Company: Bureau van Dijk E-Mail:
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