2015 was an extraordinary year for global M&A activity. Mergermarket recorded almost 17,000 transactions worth a remarkable US$4.3tn. This topped the previous record set in 2014 by over 30%. The race for top performing sector this year was very close. Energy Mining & Utilities won with US$630bn in deal value; however, the top performers were only separated by US$150bn. The other four sectors in order are: Pharma, Medical and Biotech, Consumer, Financial Services and Industrial Chemicals.
Once again North American markets lead the way with almost 1/3 of global deals and nearly 50% of global deal value. The US$1.5tn in deal value is a 36.5% increase over last year’s numbers and shows the North American market is quite healthy. Average deal size continued to climb throughout the year, with average deal size reaching an all-time high of US$389.6m, solidifying 2015 as the year of the mega deal. In spite of the drop in oil prices and China’s unstable economy, 2016 is shaping up to be another solid year for M&A in North America. While it may not rise to the record breaking levels of 2015, Mergermarket expects North America’s low unemployment and stable economy to propel it forward.
Europe quietly had a good year, both in terms of value and volume. Europe recorded US$1,099bn in deal value, a 22.5% increase, while only losing 6% deal volume. The UK was absolutely crucial to the success of the region in 2015. While the UK is already a hotbed for activity in Europe, it saw a 171% increase in value in 2015, playing host to 5 of the top 10 deals, and accounting for an almost 39% market share. The weaker Euro forced a steep, 28% decline in outbound deal value from Europe for 2015. As well, European investments in the US declined close to 20%. Despite all of this Europe is trending upward. However with investors uncertain, much of Europe’s future depends on the European Central Bank’s monetary policy.
Asia-Pacific (excl. Japan) set record after record in 2015. Mergermarket announced their highest ever total for the region, coming in at US$927.8bn, which is a 43% increase over 2014. Moreover, while most other regions lost deal volume, Asia-Pacific hit a record high with 3,377deals. Moreover, the region is attracting larger deals than ever before. Deals over US$5bn, doubled and average deal value increase of 26% Year-on-Year. China was the main contributor to the outbound investment taking up 36% of that market, while Australia dominated the inbound market taking 37.6%. The strong momentum of 2015 is expected to carry through to 2016, where an increase in acquisition of distressed assets and merge-to-survive transactions are expected to play a key role.
Japan followed the rest of the Asia-Pacific region and had a record-breaking year. It was a major market for mega-deals, and that helped it nearly double its 2014 deal value on virtually the same number of deals as 2014. The insurance sector in Japan has helped spark the robust turn in the M&A market, and Mergermarket intelligence predicts the foreign acquisition boom is likely to continue for 2016.
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