44 Acquisition International - Issue 1 2019 The aggregate value of global mergers and acquisitions (M&A) announced over the last 12 months represents the largest for any year on record, according to Zephyr, the M&A database published by Bureau van Dijk, as 92,260 deals worth an aggregate USD 4,827,758 million were signed off in 2018. he impressive result came despite volume declining 6 per cent year-on-year from 97,872 deals in 2017; however, volume was not so disappointing as 2017 represented the largest recorded volume on record and therefore levels in 2018 were the second-highest ever. Value improved 11 per cent during the period under review (2017: USD 4,349,474 million). H1 2018 represented the second-highest recorded result for a half year period on record, following H1 2007 when USD 2,764,817 million-worth of deals were announced (H1 2018: USD 2,748,042 million). H2 2018 was also impressive with USD 2,079,716 million invested across 43,083 deals; however, it is worth noting this result is the lowest for a H2 period since H2 2014 (USD 2,033,548 million). In addition, Q1, Q2 and Q3 each improved when compared to the same timeframe in 2017, further boosting overall M&A value globally, despite Q4 declining on a 12-month comparison to USD 990,851 million in Q4 2018, from USD 1,210,839 million in Q4 2017. The increase by value against the slight decline by volume suggests buyers favoured single deals with higher individual valuations over prolific dealmaking in 2018, which is further evidenced by the year’s 17 largest deals being worth USD 20,000 million, or more. Four of these exceeded USD 50,000 million and together represent 6 per cent of total global value for the 12 months under review. The largest is worth USD 85,100 million and involves Walt Disney agreeing to acquire Twenty-First Century Fox. The second-biggest deal involves CIGNA Corporation buying US-based Express Scripts Holding Company for USD 67,000 million. Takeda Pharmaceutical is close to completing the third-biggest transaction, a USD 62,373 million bid for UK-based drug developer Shire announced in May. T-Mobile US agreed to acquire Sprint for USD 59,000 million, Comcast increased its offer for UK broadcaster Sky to USD 47,879 million and E ON Verwaltungs picked up a 77 per cent stake in Germany’s Innogy for USD 46,533 million in the fourth-, fifth- and sixth-largest deals this year. Targets in North America, Western Europe and the Far East and Central Asia were the most popular in 2018, with North America leading the way by value with USD 1,576,063 million. Western Europe was second with USD 1,477,618 million, followed by the Far East and Central Asia (USD 1,147,109 million) and South and Central America (USD 239,769 million). In terms of volume, Western Europe was top with 29,004 deals, ahead of the Far East and Central Asia with 27,228 deals and North America with 21,289 deals. Eastern Europe was fourth but was some way behind the top three, with 6,693 deals. The machinery, equipment, furniture and recycling industry was the most popular target sector in 2018, with 10,715 deals worth an aggregate USD 571,866 million announced in the 12-month period. This represents an increase for the sector from 10,293 deals worth USD 545,772 million in 2017. Chemicals, rubber and plastics came second in terms of value with USD 449,209 million, while banks, the primary sector and gas water and electricity also recorded significant values of USD 263,502 million, USD 242,468 million and USD 238,991 million, respectively. By volume, the wholesale and retail trade industry was second with 5,543 deals, which is half the number of deals recorded for the machinery, equipment, furniture and recycling industry. Chemicals, rubber and plastics placed third with 4,730 deals, followed by publishing and printing (4,325), metals and metal products (4,102) and construction (3,629). To sum up, 2018 was more than an impressive year for M&A as dealmaking exceeded any other previous value on record due to the large number of sizeable deals that were announced over the 12 months. With 2019 underway, the coming year will have to go some way to exceed 2018, but with the USD 74,000 million purchase of Celgene by Bristol-Myers Squibb already having been signed off last week, the year could prove to be another significant one for M&A. Company: Bureau van Dijk E-Mail:
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