Mergermarket recently released its 2015 full-year edition of Deal Drivers Americas (the Review). This comprehensive review of M&A activity in the Americas confirmed that 2015 was a year of mega-deals. Transactions involving giants such as Pfizer, Time Warner Cable, and Kraft contributed to an increase of 30% in M&A value, reaching a total of US$4.28 trillion across North America. In the US alone, deal value rose 40% since 2014, hitting a record high of almost US$2 trillion.
The Review evaluated by sector and by region. Some of the sector highlights include:
- Technology, media and telecom: Technology, media and telecom was the most active sector in 2015 accounting for a fifth of North America’s annual M&A annual volume and deal value. The Review projected that the technology boom will continue to drive M&A activity in this sector in 2016 as companies seek involvement in the Internet of Things, cloud computing and big data.
- Financial services: The Review reports that M&A volume in financial services in 2015 increased by 8 and expects that foreign-investor interest in North American insurance companies and consolidation trends in banking will continue to drive dealmaking in this sector in 2016. It is also anticipated that shareholder activism will result in more banking deals as investors raise larger funds.
- Energy, mining, and oil and gas: Energy, mining, and oil and gas dealmaking felt the impact of the drop in the commodity price in 2015 with M&A volume falling 28% and value falling 21% since 2014. A more active year is projected for 2016 however, given the increasing demand from private equity firms and the pressure on oil majors for growth.
- Life sciences and healthcare: Dealmaking in life sciences and healthcare accounted for 16.5% and 10.2% of all North American deal value and volume respectively, in 2015. M&A activity is expected to continue to rise in this sector, as bigger pharmaceutical companies consolidate and the Affordable Care Act pressures healthcare providers to merge.
The Review also reported on regional findings for Canada, Latin America, West and South (including the western and southern American states respectively). In Canada, energy and mining deals accounted for 60% of all Canadian dealmaking value in 2015. The Review indicates that while M&A volume is expected to increase in the energy and mining commodity-driven sector, inbound dealmaking is also anticipated to rise due to the strength of Canadian dollar.
The Review anticipates that the drivers of M&A activity from 2015 will persist in 2016. Corporations will continue to pursue growth through acquisitions and competitors will continue to consolidate. Although the instability of the global economy may stymie IPOs, life sciences and technology firms will continue to enter the public equity market. It follows that M&A activity in the Americas is well positioned for another strong year in 2016.
The author would like to thank Robyn McLaren, articling student, for her assistance in preparing this legal update.
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