Mergers and Acquisitions
The $4 Trillion Year. Global M&A Reaches New Heights
As we sprint towards the finish line of 2015, global M&A activity has already surpassed previous years, with $4.4 trillion of announced deals, exceeding a total of $3.8 trillion in 2007. From pharma to tech, global deal-making is on a tear. The U.S. market comprises half of the overall total – a record year, according to Thomson Reuters. The $2.2 trillion in U.S. target deals beats the previous record of $1.6 trillion set in 2007.
The healthcare and technology sectors have been running at a rapid deal making pace all year and are neck and neck for the top spot in 2015.
Large deals grabbing headlines this year include Dell’s deal with EMC, the Charter/Time Warner merger, Anthem’s acquisition of Cigna, Pfizer’s deal with Allergan, and the apparently soon-to-be announced deal between Dow and DuPont. The surge in M&A has been driven in part by shareholder demands on CEOs, said David Solomon, co-head of investment banking at Goldman Sachs. Corporate acquirers are continuing to “get rewarded generally by the market,” he said. “You look at the stock price for a corporate acquirer on the day of an M&A announcement. So far in 2015 that number has been positive.” “And that continues to spur other deals,” he said. [1]
Global M&A volume in November 2015 totaled a monthly record high of $606.6 billion, up 7% on the previous monthly record of $567.1 billion just set in October 2015. Pfizer’s proposed $160 billion merger with Allergan, announced on November 23rd, is the second biggest M&A transaction on record, behind Vodafone AirTouch’s $172 billion acquisition of Mannesmann in November 1999. [2]
It’s a year for the record books, and it’s not done yet.
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Alan Fullerton is a partner with Mirus Capital Advisors. He works with owners of middle-market businesses and can be reached at fullerton@merger.com.
[1] November 12, 2015 interview as reported by CNBC.
[2] Dealogic, December 1, 2015.
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