Deal activity broke US $3tn for the fourth consecutive year.
Submitted by Mergermarket
Mergermarket, an Acuris company, has released its Global M&A Round-Up for 2017, including its league tables for financial advisors. A couple key findings include the following:
- Global M&A fell just short of previous years, as uncertainty appeared to take its toll on investments. M&A dipped 3.2% by value to US $3.15tn (18,433 deals) in comparison to 2016 (US $3.26tn, 19592 deals), while deal count dropped by only 205 from the 2016 record. This marks the fourth consecutive year in which M&A has broken the US $3tn barrier. The year ended on a high with December seeing the largest monthly total of the year with US $427.5bn. There were five megadeals (> US $10bn) in the final month, including the two largest deals of the year: Disney acquiring Fox's entertainment assets for US $68.4bn and the US $67.8bn tie-up between CVS and Aetna. December saw the highest monthly number of megadeals in 2017 and the largest in combined value with US $189.1bn. The last month at this level was back in July 2016, which saw six megadeals worth US $108.9bn.
- US M&A saw US $1.3tn worth of deals announced in 2017, with a total of 5,326 transactions reaching the signing table. This was the second consecutive year of decreases in overall value since the record highs of 2015, at the end of which interest rates, effectively zero since 2008, had finally begun to rise slightly. As the economy continues to move on from the financial crisis, inflation has remained low, and further increases in the federal funds rate are expected in 2018 following three gradual raises in 2017. Further, Congress's recently passed tax legislation, which included a sizeable cut to the US corporate tax rate, has fueled anticipation over how future tax savings might be spent over the next several years, particularly with regard to M&A. US dealmaking, therefore, while still cautious in today's political climate, has continued at a steady pace.
- Despite coming under fire from the political arena, Media M&A continued to feel pressure from industry challengers such as Netflix to consolidate in order to survive in an age of digital streaming. The secor saw US $103bn worth of deals, its second-highest total value behind 2016's peak of US $133.3bn, though most of the latter had been due to the US $105bn AT&T/Time Warner transaction, whose fate remains unclear after a block by the Justice Department in November. However, such events did not prevent Disney from announcing that it had signed an agreement to acquire most of 20th Century Fox for US $68.4bn, which then became the largest deal of 2017.
Read the full report, and don't forget to review the charts breaking down activity by sector, value, year-to-year-analysis, etc.