2015, the most prolific 12 months for worldwide deal making in history, continues to be remembered as the year of the megadeal having experienced record-levels of M&A activity in the United States, Asia Pacific and rapidly consolidating industries ranging from healthcare and energy & power to technology and industrials. Unsurprisingly, 2016 saw merger announcements fall, with increased stock market volatility, a sharp decrease in the number of mega deals and an all-time year-to-date record for the dollar volume of failed bids.
But how will 2016 be remembered? While far behind 2015, it will be remembered for some transformative deals, which helped make it the third-biggest year on record for mergers and acquisitions, trailing only 2015 and 2007. Indeed, Reuters recently reported that a drive by some of the world’s largest corporations to find new avenues to expand in the face of anaemic economic growth did lead major acquisitions in areas adjacent to their core business.
Some of these transformative deals included:
Access all the details of the Top 15 Worldwide Announced Deals here
Matthew Toole, Head of Thomson Reuters Deals Intelligence, accompanied by Reuters Breakingviews will put the numbers into context January 19th, introducing a free webcast offering a full review of deal making trends in 2016 and a preview of what is yet to come this year.
Worldwide Deal Making falls despite Q4 growth
Worldwide M&A activity totaled US$3.7 trillion during full year 2016, a 16% decrease from full year 2015 levels and third largest annual period for worldwide deal making since records began in 1980. Just over 100 deals with a value greater than $5 billion were announced during full year 2016, their combined value down 30% compared to a year ago. Overall, 46,055 worldwide deals were announced during full year 2016, a 1% increase compared to last year.
The value of worldwide M&A announced during the fourth quarter of 2016 totaled US$1.2 trillion, an increase of 50% compared to the third quarter of this year. Seven of the top 10 deals announced during full year 2016 were announced during the fourth quarter.
Cross-border M&A reaches 8-year high, while US, Asia Pacific M&A drops
Powered by record levels of outbound M&A from Chinese acquirors and inbound M&A for US assets, cross-border M&A activity totaled US$1.4 trillion during full year 2016, accounting for 38% of overall M&A volume and the highest annual percentage since full year 2008.
China outbound activity in 2016 doubled from 2015, posting US$220.9 billion from 906 deals, a 45% increase in number of transactions.
The top announced Asian-involvement deal for 2016 was the US$46.6 billion acquisition of Syngenta, a Swiss biotech, by CNAC Saturn, a subsidiary of China state-owned China National Chemical. The biggest deal from the fourth quarter of 2016 in Asia, was the acquisition of India’s Essar Oil for US$12.9 billion by Petrol Complex (a subsidiary of PJSC Rosneft Oil).
M&A activity for United States targets totaled US$1.7 trillion during full year 2016, a decrease of 17% compared to the level of activity seen during 2015. With US$896.3 billion in announced deals during the full year 2016, Asia Pacific M&A fell 22% compared to a year ago. Asia Pacific targets accounted for 25% of worldwide M&A, compared to 21% for Europe.
Energy & power, tech, materials lead balanced sector mix
Deal making in the Energy & Power sector totaled US$608.0 billion during full year 2016, an increase of 15% compared to 2015 levels. Technology M&A decreased 15% by value, but decreased just 1% by number of deals while materials deal making increased 14% compared to a year ago.
Six of 12 major industry sectors each accounted for at least 10% of full year M&A the most balanced annual sector breakdown since records began in 1980.
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Additional quarter-end coverage and analysis are also available at www.reuters.com/finance/deals