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M&A at a Glance (November 2014)
Practices
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November 14, 2014 download PDF
The M&A market cooled significantly in October 2014 by all
measures, except for the number of domestic U.S.
transactions. Global volume, as measured by total dollar
value, experienced its lowest month since January 2014, declining
for the fourth consecutive month to $221.1 billion (a 24.2%
decrease from September 2014). U.S. volume by total dollar
value also declined substantially for the third consecutive month
to $90.5 billion (a 30.4% decrease from September 2014).
The number of transactions also declined globally in October 2014,
but was up slightly in the U.S., increasing 4.2% over September
2014. This increase resulted in another high watermark for
the number of U.S. transactions for the last 19 months.
Figure 1.
Oil & Gas took over as the most active U.S. target industry by
volume in October 2014. Healthcare was the second most active
U.S. target industry by volume in October 2014, and maintained its
lead as the most active U.S. target industry by volume for the last
12 months. Figure 2. Cross-border volume and the
average value of deals were also down substantially. Inbound
M&A was down by over 78% and outbound was down by over
one-third. Canada retook the top position for inbound U.S.
crossborder transactions by deal volume in October ($5.65 billion),
but lost its top spot by deal number to the U.K, which posted 27
transactions compared to Canada's 23 during October. The U.K.
also had a strong October for outbound U.S. crossborder
transactions, with $5.58 billion in volume. Figure 3.
Looking solely at U.S. public mergers valued at $100 million or
higher, the largest U.S. public merger in October 2014 was the
offer for CareFusion Corp. by Becton, Dickinson and Company ($11.80
billion). Figure 5. The average target break fee
declined slightly in October 2014 to 3.2% of equity value.
Average reverse break fees declined to 4.1% in October 2014,
compared to 4.9% over the last 12 months. Figure 7. The
incidence of tender offers in October 2014 was low (7.7%) relative
to the 12-month average (25.3%). Figure 11. Finally, we
note that approximately 13.3% of offers were hostile/unsolicited as
compared to 17.3% over the last 12 months. Figure 12.