M&A Activity Starts Year on a Roll

The momentum that powered corporate merger and acquisition (M&A) activity to a post-crisis high in 2014 rolled over into the first quarter of 2015, reports Mergermarket.

The group reports that globally Q115 saw a total of 3,213 deals valued at US$719.1bn completed, increasing 13.4% by value compared to Q114.

The top two global deals targeted consumer companies and included last month’s US$54.4bn deal to unite HJ Heinz with Kraft Foods. They pushed the consumer sector to the highest quarterly value since Q108, with deals valued at US$142.2bn.

Energy, mining and utilities firms appear to be seeking alternatives to M&A while they ride out the sliding oil price. The 163 fewer deals compared to Q114 saw deal values drop by 13.4% year-on-year (YoY) to US$72.8bn.

Cross-regional activity was even higher than Q114, up 12.2% with deals valued at US$184.1bn. Transatlantic activity took a back seat while interest from Asia in Europe reached a quarterly peak.

Private equity (PE) buyouts fell to the lowest quarterly value since Q210 at US$53.8bn, down more than a third compared to every quarter through 2014. At the same time, after a record year for exits in 2014 with every quarter posting values above US$100bn, exit value fell to US$69.1bn.

Mergermarket MandA activity

Deal values in Europe during Q115 were slightly higher than a year earlier with M&A valued at US$185.1bn, boding well for activity during the rest of 2015 as 2014 ended on a post-crisis high.

The US$94.2bn-worth of inbound deals increased 69.5% from the Q114 total of US$ 55.6bn. Heightened interest from Asian bidders was a key driver, particularly Japan, which has almost overtaken China.

Telecommunications commanded the highest deal value in Europe at US$42.6bn. The Q115 total was the second quarterly increase, up 329.1% from Q314, and 136% from Q414.

PE buyout value slid to the lowest quarterly level since Q113 with deals valued at US$17bn, a 34.2% decline from Q114, and a sharp 63.4% drop after Q414’s rebound.

The UK’s M&A value in Q115 was more than triple that of a year ago, with US$75bn-worth of deals, reaching the highest quarterly value since Q409. Over half (58.5%) of this activity came from bidders outside of Europe, with deals valued at US$43.9bn.

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