April 19, 2018

Consumer sector continues to grow in strength, bucking trend of general decline

Donald Davis, Vice President, Advisor Sales | April 19, 2018

February’s M&A activity saw value totals comparable to the same month last year, but from far fewer deals. Overall, there were 914 deals worth US$183.7bn – a 1.4% fall in value, but a 35.5% decline in volume year-on-year (1,419 deals worth US$186.4bn). Meanwhile, global cross-border deals in February saw a 34% drop versus the same period in 2017, with a total value of US$57.9bn. Domestic deals, however, saw an 18.1% surge worth US$125.8bn.

The most active sector globally was Energy, Mining & Utilities with 80 deals worth US$29.5bn, accounting for 15.9% of market share by value. This was closely followed by the Consumer sector, which earned 14.9% of global market share by value through 96 deals worth US$27.5bn.

The two largest deals for the month occurred in the fifth-ranked Technology, Media and Telecommunications sector. Denmark’s DK Telekommunikation, backed by a consortium comprised of pension funds PFA, PKA, and ATP as well as Macquarie Infrastructure & Real Assets Europe, led the way with a US$10.4bn takeover offer for TDC Group, a Denmark-based and listed telecom provider. This was followed by aerospace and defense company General Dynamics acquiring US IT services company CSRA Inc. for US$9.5bn.

By region, North America achieved the largest market share by value (45.3%), with 311 deals worth US$80.1bn. Europe contributed 28.2% to market share by value with 306 deals at US$49.9bn. However, both were down on deal value and volume when compared to February 2017.

But it was Asia Pacific (excluding Japan) that provided a shining example, posting the second-highest value on Mergermarket record (since 2001), with 210 deals worth US$44.2bn. This allowed the region to account for 25% of global market share by value, and also represented an increase of 74.4% on value compared to the US$25.4bn recorded in February 2017. This strong performance was fueled by the purchase of 69.23% stake (US$4.2bn) in HNA Group Finance by a consortium that included HNA Group, Hainan Airlines Commercial Holdings, Haikou Meilan International Airport Company Limited, and HNA Technology Group.

Private equity continues to post a strong performance with 409 buyout deals worth US$68.5bn occurring through February this year. This represents an increase of 68.3% in value and 24.3% in volume compared to the same period last year. Backed by an exceptionally strong performance in 2017, these early indications, with large deals such as Blackstone’s US$20bn buyout of a 55% stake in Thomson Reuters’ Financial and Risk Unit, suggest another boom year may be in store for PE.

For greater insight into these trends and more, download The Monthly M&A Insider, presented by Merrill Corporation and Mergermarket. The report explores the global M&A market with respect to the numbers, movements and trends, as well as revealing the top financial and legal advisors – globally and across six regions (North America, Central and South America, Europe, Middle East and Africa, Asia-Pacific and Japan).

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