This week’s $3.8 billion stock swap transaction between South Korea’s Samsung Heavy industries and Samsung Engineering pushed Asia Pacific target M&A activity to $424.0 billion for year-to-date 2014, a 64% increase compared to a year ago and the strongest year-to-date period for deal making in the region since records began in 1980. China, Australia and South Korea account for 76% of announced M&A activity so far this year, led by financials (22%), real estate (14%) and industrials (12%).
A trio of multi-billion dollar mergers announced this week pushed global deal making to $2.40 trillion for year-to-date 2014, a 75% increase compared to a year ago and already besting full year 2013 M&A levels ($2.38 trillion). Led by targets in the Americas, 72 deals over $5 billion have been announced this year, a 56% increase compared to full year 2013 when 46 large-cap deals contributed to the annual total. Healthcare deals accounted for 13 worldwide large-cap deals followed by energy & power (11) and telecommunications (8).
A trio of multi-billion dollar US-dollar denominated corporate bond offerings topped the list of weekly offerings and pushed the volume of US marketplace investment grade corporate bond offerings to $712.9 billion for year-to-date 2014, an increase of 10% compared to a year ago and the strongest year-to-date period since records began in 1980. Led by bank issuance which accounts for 32% of year-to-date volume, US issuers make up 60% of this year’s volume, followed by Canada, the United Kingdom and Japan.
CIT Group’s $3.4 billion purchase of California’s OneWest Bank pushed the level of deal making in the financial sector to $206.6 billion for year-to-date 2014, a 54% increase compared to a year ago and the strongest year-to-date period for M&A in the sector since 2011. With strong deal making activity in the healthcare, media and energy sectors, M&A in the financial sector accounts for just 10% of the worldwide total this year, the lowest percentage since year-to-date 1989 when financials accounted for 9% of global M&A
Eight deals over $5 billion were announced this week, setting the all-time record for weekly large-cap deal making and pushing the level of deals over $5 billion to $915.9 billion for year-to-date 2014, more than triple year ago levels. Accounting for 45% of worldwide M&A so far this year, large cap deal making in the healthcare sector (12), energy & power (8) and consumer staples and media (7) make up just over 60% of the number of announced M&A deals greater than $5 billion for year-to-date 2014
This week’s competing offers for Hillshire Brands from Pilgrim’s Pride and Tyson Foods brings the level of overall hostile and unsolicited bids (including withdrawn) to $296.2 billion from 36 deals for year-to-date 2014, a slight uptick in number of deals compared to a year ago and the strongest year-to-date period, by value, in seven years.Since 1984, over 1,800 hostile and unsolicited deals have been announced with 58% of those deals eventually withdrawn, including this week’s collapse of the $6.9 billion merger between Scotland’s Weir Group and Finland’s Metso Oyj and Pfizer’s $122.3 billion offer for AstraZeneca. The withdrawn total includes target companies which eventually went to another bidder, such as this year’s dual bids for Time Warner Cable of the United States and France’s SFR. Within the universe of withdrawn unsolicited bids over the past 30 years, 23% had a successful competing offer.
Global follow-on offerings total $189.9 billion for year-to-date 2014, a decrease of 10% compared to a year ago, while the number of global follow-on offerings increased 3% compared to year-to-date 2013. European issuers account for 38% of global issuance so far this year, followed by the Americas (36%) and Asia Pacific (21%). Bank of America Merrill Lynch, which has led an industry-leading 109 follow-on offerings this year, has seen a 2.5 point increase in follow-on underwriting this year
The $3.2 billion combination of the United Kingdom’s Carphone Warehouse and Dixons Retail PLC ranks as the largest UK domestic M&A deal since Reckitt Benckiser Group PLC acquired SSL International PLC for $3.9 billion in July 2010. UK acquisitions of UK targets totals $21.3 billion so far this year, an increase of 25% compared to this time last year
Blackstone Group’s $1.7 billion purchase of The Cosmopolitan of Las Vegas marks the 14th acquisition or stake purchase this year by Blackstone or an affiliated fund. Blackstone announced a $5.4 billion bid for Gates Global in April, a minority stake in Gianni Versace SpA and participated in investor groups to purchase a stake in Kronos Inc and full control of Ipreo LLC from KKR
This week’s $4.5 billion corporate debt offering from Pfizer Corp brings the level of global investment grade corporate debt in the pharmaceutical sector to $13.2 billion, down 9% from a year ago
Bolstered by double-digit percentage growth in Europe and Asia Pacific, global IPO activity has increased 55% compared to year-to-date 2013, totaling $70.6 billion – the strongest annual start for global IPOs since 2007. Morgan Stanley commands 9.2% of the global IPO market for first place this year, up from sixth place and 5.4% last year
On Friday, news broke that Apple is close to paying a record $3.2 billion for Beats Electronics. This is significant, considering that Apple has not made a billion-dollar acquisition in over a decade. Today’s graphic shows the company’s major acquisitions since 1997.
12 May 2014Thomson Reuters
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Cross-border deals, which account for 43% of announced worldwide M&A, total $571.6 billion so far this year, nearly triple the level of activity seen during year-to-date 2013 and the strongest year-to-date total for cross-border deal making since 2007. Healthcare, industrials and materials account for 57% of cross-border deal making this year, up from 25% a year ago. The United Kingdom and United States are the top cross-border targets so far in 2014, while the United States and Switzerland are the most active cross-border acquirors.
The dealmaking landscape has shifted. Not only have we witnessed a change in its leaders, but many of them believe that medium sized biopharma companies are more active and innovative than their large pharma counterparts. Join the next generation of dealmakers at Allicense 2014.