74 Acquisition International - April 2017 Both the volume and value of M&A deals announced worldwide declined in the first quarter of 2017, according to Zephyr, the M&A database published by Bureau van Dijk. In all there were 22,093 deals worth $1,100,655 million announced during the three months, down from the $1,467,778 million injected across 25,172 deals in Q4 2016. ore promisingly, value actually improved on the same quarter in 2016, climbing 10% from $1,030,342 million to $1,100,655 million year-on-year, despite the fact that volume was down over the same timeframe. The declines recorded worldwide are not exactly encouraging, but the situation may appear worse than it is at first glance. Despite the downturn in deal making levels, plenty of sizeable transactions are still being signed off, as evidenced by the fact that all of the quarter’s top ten deals by value were worth in excess of $10,000 million. The largest of all came in at $49,400 million and involved a US target as British American Tobacco agreed to up its stake in US cigarettes maker Reynolds American in January. This was followed by the $30,055 million purchase of Swiss biopharmaceuticals manufacturer Actelion by domestic peer Cilag Holding, which was also announced in January. In all four deals broke the $20,000 million barrier, with the other deals featuring a Chinese and a Swiss target, respectively. The US was targeted in four of the top ten deals for the quarter, while no other country featured more than once; others to have attracted investment in these deals include the Netherlands, Italy and the UK. Given the US’s prevalence in the year’s top ten deals to date, it is not surprising to see North America lead the volume and value rankings by region as $394,719 million was injected across 6,329 transactions. Western Europe placed second on both fronts with 6,133 transactions worth $302,375 million, while the Far East and Central Asia was third with 5,946 deals and $294,321 million. Despite the high levels of investment attracted by these regions, all three declined both quarter-on-quarter and year- on-year in terms of volume and value. By contrast, the less frequently targeted regions, like Oceania, Eastern Europe, Africa and Middle East, all posted increases. Oceania and Eastern Europe both improved on Q1 2016, while the Middle East climbed from Q4 2016 and Africa was higher both year-on-year and quarter-on-quarter. This suggests that, rather than an overall global decline in deal making levels, what we are seeing is a drop- in investment into the traditional regions, while others appear to be going from strength to strength. In terms of the sectors being targeted, the banking, insurance and financial services industry has attracted the most investment in 2017 to date with $199,495 million across 3,307 deals. It was followed by personal, leisure and business services, which featured in 4,235 deals worth $190,199 million, while mining and extraction (1,364 transactions at £164,265 million) placed third. The largest deal in the banking, insurance and financial services sector did not feature in the quarter’s top 10; it took the form of a $13,990 million rights issue by Italian banking player Unicredit. In conclusion, at first glance the results for Q1 2017 appear to be fairly disappointing, given the declines in volume and value witnessed across the board over the three months. However, upon closer inspection we can see that a number of countries continue to attract strong levels of investment, but overall results have been hamstrung somewhat by a drop in the value of deals being announced in regions which are traditionally the most frequently targeted, including North America, Western Europe and the Far East and Central Asia. As such, the fact that M&A activity remains high in other regions, which are less likely to hit the headlines, leaves plenty to be positive about as we move into the second quarter. Company: Bureau van Dijk E-Mail:
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