Zephyr Global M&A Review, 2018

Global M&A value up year-on-year

  • Value increases in all regions except Asia-Pacific and MENA, boosted by sizeable deals in Western Europe and North America
  • PE/VC value also up, driven by investment in Western Europe

The aggregate value of global mergers and acquisitions (M&A) increased in 2018, according to M&A information collected by Bureau van Dijk, a Moody’s Analytics company, and the leading publisher of company information. In all, there were 97,709 deals worth a combined USD 5,303,713 million announced in the year under review. In terms of volume, this represents a 7 per cent decline from 104,849 deals in 2017, while value climbed 10 per cent from USD 4,826,377 million over the same timeframe. Value was boosted by a few sizeable deals in 2018 as four broke the USD 50,000 million-barrier during the year and 17 were worth in excess of USD 20,000 million.

Bureau van Dijk’s research shows that the increase in global M&A value has been mirrored across most regions in 2018. The results for Western Europe are particularly positive as both volume and value improved on 2017’s result. The only regions in which value declined in 2018 were Asia-Pacific and MENA. Globally, the US was the most frequently targeted country in 2018 and also led the way by value. In all, the country was targeted in 19,386 deals worth a combined USD 1,680,653 million over the 12 months. Given that the country was targeted in 12 of the year’s 25 largest deals by value, including the top two, it is unsurprising to see it dominate the country rankings again. It is also worth noting that, of those 12 high-value deals, 11 also had US acquirors, showing that the country’s value has been driven by domestic activity, rather than foreign investment. The year’s largest deal was worth USD 85,100 million and saw Walt Disney agree to acquire Twenty-First Century Fox. This was followed by CIGNA Corporation buying Express Scripts Holding Company for USD 67,000 million. The year’s largest deal with a non-US target placed third overall as Takeda Pharmaceutical agreed to take over UK-based speciality biopharmaceuticals maker Shire for USD 62,373 million.

Lisa Wright, director at Bureau van Dijk, commented, “2018 has proven to be a positive year in terms of global M&A activity. The year’s aggregate deal value stands as the third-highest on record, behind only 2007 and 2015, and although overall deal volume is lower than for each of the last four years, it still stands as the fifth-highest annual deal volume on record. It will be interesting to see whether this upward trend continues into 2019 and whether any year will see similar levels of dealmaking to 2015, when value hit a record high of USD 5,871,269 million.”

Bureau van Dijk’s data shows that the volume and value of private equity and venture capital (PE and VC) dealmaking increased year-on-year in 2018 as 25,048 such deals worth an aggregate USD 825,766 million were announced over the 12 months. In terms of value, this represents the second-best result on record for PE and VC investment, surpassed only by the USD 921,705 million-worth of deals recorded in 2007. Although volume also represents an improvement on both 2016 and 2017, it fell short of the 27,228 deals announced in 2015. However, it is worth noting that this was the busiest year on record in terms of the volume and value of announced PE and VC deals. Indeed, the only other year on record with more deals than 2018 was 2014 (25,878). PE and VC value has undoubtedly been boosted by a few sizeable deals in 2018; the largest was worth USD 20,000 million and involved the purchase of a 55 per cent stake in Thomson Reuters’ financial and risk business by Blackstone, GIC and Canada Pension Plan Investment Board.

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