A look back on deal activity in 2014 undertaken by Mergermarket in its December 2014 Monthly M&A Insider reveals that North America dominated global deal value last year, hosting 48.1% of the value. Europe was next, with 27.3% of global deal value, but surpassed North America, dominating the global M&A scene in terms of deal volume.
In terms of industry sectors, Energy, Mining & Utilities led the pack with one-fifth of global deal value. The Pharmaceutical, Medical & Biotechnology, Industrials & Chemicals, Consumer and Telecommunications sectors followed closely behind. Global deal volume data reveal that the Industrials & Chemicals sector was in first place with one-fifth of global deals, and the Consumer, Technology, Business Services and Energy, Mining & Utilities sectors, respectively, were next in the rankings.
Although the number of deals announced decreased in 2014, Latin American markets experienced a 40% rise in the total deal value, suggesting that they are being viewed as increasingly valuable. Brazil, Mexico and Chile took center stage, hosting the most M&A activity in the region. The Energy, Mining & Utilities industry sector proved to be the most valuable and also experienced the greatest number of transactions.
Here, the Energy, Mining & Utilities sector dominated deal value in 2014, comprising almost a quarter of the market value, whereas the Industrials & Chemicals sector experienced the greatest deal volume. Overall annual deal values increased markedly, as did total deal volumes. It is expected that 2015 will be an active year for dealmakers, with constant oil prices suggesting that North American economies are stabilizing.
Similarly to North America, Energy, Mining and Utilities sector deals were most valuable and Industrials & Chemicals sector deals were the most numerous in the Asia-Pacific region last year. Oil deals are rebounding as a result of increasing energy demand in Southeast Asia and a resurgence of private equity investment. China was the most prominent player in the region, hosting approximately 40% of deals, in terms of both value and volume. In 2015, the China-Australia Free Trade Agreement is expected to boost M&A activity in the region, as are a series of privatizations of state power and electric assets.
The European continent experienced a major upswing of deal activity in 2014, with France, the United Kingdom and Germany being the most active, accounting for 45% of the region’s total M&A activity. The Pharmaceutical, Medical & Biotechnology sector was the most valuable and took 13.8% of the region’s market share, whereas the Industrials & Chemicals sector experienced the largest number of deals.
The Middle East & Africa
The Consumer sector grew the most in this region last year, rising above all other industries near the end of the year and indicating that the region’s growing consumer market is stimulating investment. Nonetheless, Energy, Mining & Utilities saw the largest share of deals in terms of both value and volume. The most active country in 2014 was South Africa, accounting for a quarter of deal value and nearly 30% of deal volume. Israel, the UAE and Nigeria came next.
Overall, it can be seen that North American and European markets continue to dominate global deal value but emerging markets are experiencing an upswing in terms of value and volume. The Energy, Mining & Utilities sector is driving deal value in all regions, with the exception of the European markets where the Pharmaceutical, Medical & Biotechnology sector is more prominent.
The author wishes to thank Carole Gilbert, articling student, for her assistance in preparing this legal update.