80 Acquisition International - Issue 4 2018 Both the volume and value of M&A deals announced globally declined in the first quarter of 2018 to 20,758 deals worth a combined USD 1,302,865 million, according to Zephyr, the M&A database published by Bureau van Dijk. In terms of volume, this represented a 19 per cent decrease, while value slipped 8 per cent from 25,767 deals worth USD 1,420,069 million in Q4 2017. espite declining quarter-on-quarter, value actually improved 12 per cent year-on-year, against a 19 per cent decline by volume from 25,557 deals worth an aggregate USD 1,160,819 million in the first quarter of 2017. While the declines recorded globally may not be encouraging at this stage, there are still four days to go until the end of Q1 2018 at the time of writing. On a positive note, regions including Western Europe and South and Central America have recorded an increase in value over the course of the three months and many sizable transactions have already been signed off in the period. This is evidenced by the fact all the top ten deals announced globally by value were worth in excess of USD 14,000 million, with the top five transactions worth USD 20,000 million, or more. Two of these transactions exceeded USD 50,000 million and together represented almost 10 per cent of total value recorded for the three months under review. The largest deal signed off during Q1 2018 involved Cigna agreeing to acquire US-based pharmacy benefits management group Express Scripts Holding for USD 67,000 million. This is followed by Qualcomm’s planned acquisition of Dutch chipmaker NXP Semiconductors for USD 53,000 million. The third-largest deal involves E.On buying a 77 per cent stake in German electricity provider Innogy for USD 40,654 million, while the fourth-biggest deal is the USD 22,338 million acquisition of Abertis Infraestructuras by Atlantia and Actividades de Construccion y Servicios (ACS) via a newly-formed holding company. Despite a North American company being targeted in the quarter’s largest deal, the second-, third- and fourth-largest transactions featured Western European businesses and placed the region in the number one position by value. Companies based in Western Europe were targeted in 6,149 deals worth a combined USD 428,012 million in Q1 2018, which despite declining by volume, represents an 18 per cent increase by value from 7,507 deals worth USD 362,230 million in Q4 2017. Results for Western Europe were more impressive on a 12-month comparison as volume declined at a slower rate of 12 per cent, while value was up 35 per cent on 6,978 deals worth USD 317,337 million in Q1 2017. Companies operating in South and Central America also improved by value quarter- on-quarter to 461 deals worth USD 90,337 million. North America (USD 425,729 million), the Far East and Central Asia (USD 273,249 million), Oceania (USD 26,265 million), Eastern Europe (USD 22,032 million), Africa (USD 11,584 million) and the Middle East (USD 11,213 million) all declined by value over the three-month period. In terms of the sectors being targeted, the banking, insurance and financial services industry has attracted the most investment once again in 2018 to date, with USD 285,868 million across 3,090 deals. It was followed by personal, leisure and business services with 4,008 deals worth USD 242,981 million, while the computer, IT and Internet services sector was third with 3,993 deals worth USD 205,908 million. The largest deal targeting the banking, insurance and financial services industry was the eighth biggest deal of Q1 2018 and featured Agricultural Bank of China raising USD 15,788 million in a capital increase. To sum up, while the overall decline in global M&A value for the three months will leave some feeling disappointed, at closer inspection there are some positive notes. Regions including Western Europe and South and Central America have improved during the quarter, which is attributable to a large number of sizable deals announced during the period. While North American businesses continue to be popular targets of M&A investment, having featured in ten of the top 20 deals by value, a few large cash injections into other regions such as the Far East and Central Asia and Oceania could prove to make all the difference as we move into the second quarter. Company: Bureau van Dijk E-Mail:
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