The slowing pace of global M&A continued in November as dealmakers continued to be deterred by global political uncertainty. A total of 1,122 deals worth US$146.5bn were announced globally during the month, reflecting a 42.9% drop in value year-over-year (YoY) (1,593 deals, US$256.5), with 471 fewer transactions.
Cross-border activity also declined globally, with November 2017 registering US$43.9bn in cross-border deals – a 47.4% drop in comparison with the same month in 2016. Domestic deals also tumbled, by 40.7% on November 2016, dropping to US$102.5bn.
As the year’s M&A activity looks to be drawing to a slow close, only two regions saw an increase in deal value YoY and deal volumes fell across all regions. Asia (excluding Japan) saw 312 deals worth US$62.8bn, while Central and South America saw 32 deals valued at US$6.8bn.
It comes as no surprise then that Asia-Pacific (excluding Japan) was the strongest regional performer, contributing 42.9% to global deal value (US$62.8bn), followed by North America, which produced 32% of global deal value (US$46.9bn) for November. Half of the top 10 deals for November involved companies in China.
One such China-based transaction, November’s top deal, came from the Real Estate sector — the US$9bn acquisition of a 14.11% stake in China’s Hengda Real Estate Group by a consortium of investors. This deal helped make the Real Estate sector the second highest valued sector in November, accounting for 11.8% of market share with just 28 deals valued at US$17.3bn.
The top-performing sector for the quarter was Energy, Mining & Utilities (EMU), despite experiencing a decrease of 60.4% in value with 32 fewer deals than in 2016 (131 deals, US$82.3bn). EMU executed a total of 99 deals worth US$32.6bn, three of which featured in the top 10 deals by value for November. The biggest of these was US-based Marathon Petroleum’s US$8.1bn deal with MPLX.
Financial Services came in at a close third with 89 deals valued at US$17bn, and one top 10 deal: the sale of a 16.9% stake in Danish mortgage lender Nykredit to a group of Danish pension funds.
Private equity activity looks set to be the success story of 2017, with buyouts and exits smashing through 2016 values. There have been some 2,828 buyouts worth US$455.5bn to November – an increase of 9.7% in value on full-year 2016, and 2,213 exits worth US$464.3bn – a 2.2% increase in value versus 2016’s total.
While November’s M&A activity has declined both monthly and annually (except private equity), the 2017 value and volume figures are still well ahead of most post-crisis years and should not be judged solely against the blockbuster years of 2014 to 2016. And with a pipeline of big deals such as the merger of health insurer Aetna with US healthcare retailer CVS for US$68bn, 2018 is looking brighter.
Learn more about these and other trends and observations in the December issue of The Monthly M&A Insider. This publication explores the global M&A market with respect to the numbers, movements and trends, as well as revealing the top financial and legal advisors – globally and across six regions (North America, Central and South America, Europe, Middle East and Africa, Asia-Pacific and Japan).
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