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June 15, 2016 download PDF
The M&A market continued to stabilize in May 2016, after what has been a slow start to the year. U.S. deal volume increased by 52.3% to $179.43 billion, which is the highest monthly volume for the U.S. in 2016. Figure 1 and Annex Figure 1-A. Both strategic and sponsor-related activity contributed to the increase in total U.S. deal volume. U.S. sponsor-related activity increased by 129.6% to $44.38 billion in volume, as compared to April 2016, and strategic activity increased by 37.1% to $135.05 billion. Figure 1. Despite resilience in deal volume, the total number of U.S. M&A transactions remains at 12-month lows (722). Annex Figure 3-A. Globally, M&A deal volume increased by 38.8% to $335.98 billion in May 2016, with comparable gains in both strategic and sponsor-related activity. Figure 1. The total number of global transactions also remains at 12-month lows (2,845). Annex Figure 4-A.
Crossborder trends mirrored the overall M&A market in May 2016. U.S. inbound and outbound deal volume increased significantly, while the number of transactions for each remains near 12-month lows. Inbound deal volume increased by 145.2% to $78.58 billion, and outbound deal volume increased by 146.1% to $7.76 billion. The number of transactions was 127 and 119 for inbound and outbound transactions, respectively. Globally, crossborder deal volume increased by 77.5% to $129.61 billion, and the number of transactions reached a new 12-month low (665). Figure 1; Annex Figures 5A-7A.
Germany was the leading country for U.S. inbound transactions, by deal volume, in May 2016 ($65.97 billion), attributable to Bayer AG's $53.30 billion offer to acquire Monsanto Company, which is the third-largest transaction announced over the last 12 months. Canada maintained its monthly lead for the highest number of U.S. inbound transactions (38). Canada continues to hold its lead for U.S. inbound activity, in the aggregate, over the last 12 months, as measured by both deal volume ($106.83 billion) and number of transactions (433). As for outbound transactions, France led by deal volume ($6.91 billion), while Canada maintained its top position for the number of transactions (29). The United Kingdom and Canada each maintained their respective leads for outbound deal volume ($58.62 billion) and number of transactions (356), in the aggregate, over the last 12 months. Figure 3.
Agribusiness made a rare appearance as the most active target industry by deal volume in the U.S. in May 2016 ($65.19 billion), largely due to the Bayer-Monsanto transaction. However, Healthcare maintained its lead as the most active target industry over the last 12 months ($376.61 billion). Computers & Electronics maintained its lead for number of transactions in the U.S., both in May 2016 (206) and, in the aggregate, over the last 12 months (2,781). Figure 2.
Cash was used as the only form of consideration in 68.5% of M&A transactions in May 2016 compared to 57.5% over the last 12 months. Figure 9. The percentage of U.S. public M&A transactions involving a tender offer was 21.1% in May 2016, as compared to 17.1% over the last 12 months. Figure 11. We note that the incidence of hostile offers as a percentage of U.S. public mergers was 13.0% in May 2016, as compared to 16.4% over the last 12 months. Figure 12.
Finally, we are pleased to present our new 12-month deal trends, which are incorporated in the Annex to this issue of M&A at a Glance.