Issue 7 2019

80 Acquisition International - Issue 7 2019 There have been 50,862 mergers and acquisitions (M&A) worth an aggregate USD 2,564,297 million announced in the opening six months of 2019, representing a decline year-on-year and compared to the second-half of 2018, according to Zephyr, the M&A database published by Bureau van Dijk. alue in H1 2019 fell slightly over the six months under review from USD 2,605,115 million in H2 2018 and 16 per cent from USD 3,055,102 million in H1 2018. Despite the decline, value was not completely stripped away as the figure remained higher than H1 2017 and H2 2017. The disappointing result comes despite 11 of the top 20 deals by value being worth more than USD 20,000 million, including five that exceeded USD 50,000 million. In terms of volume, H1 2019 represents the lowest-recorded result since H1 2014 (49,991 deals), declining 18 per cent from 62,017 deals in H2 2018 and 7 per cent from 54,783 deals in H1 2018. The largest deal signed off during the six-month period involves Bristol-Myers Squibb Company agreeing to acquire US-based biopharmaceuticals group Celgene for USD 74,000 million. This was followed by a USD 69,100 million purchase of a 70 per cent stake in fertilisers manufacturer Saudi Basic Industries by Saudi Arabian Oil Company. AbbVie, via Venice Subsidiary, has agreed to acquire Irish pharmaceuticals group Allergan for USD 63,533 million in the third-biggest deal. Two more deals exceeded USD 50,000 million in the opening six months of 2019; these involved Occidental Petroleum agreeing to acquire Anadarko Petroleum for USD 57,000 million, while United Technologies is picking up Raytheon Company for USD 54,030 million. In total, 15 of the top 20 deals by value targeted companies based in the US, with other target countries including Saudi Arabia, Ireland, India and the Cayman Islands. Unsurprisingly, having featured in the majority of the top 20 deals, North America was the most popular target region by both volume and value in H1 2019, having featured in 16,653 deals worth USD 1,100,829 million. This accounts for 33 per cent of total M&A volume (50,862) and 43 per cent of total M&A value (USD 2,564,297 million), respectively. Value in North America is the highest since H2 2015 (USD 1,185,017 million) and represents an increase of 20 per cent from USD 913,824 million in H2 2018 and a slight rise from USD 1,091,252 million in H1 2018. The Far East and Central Asia placed second on both fronts in H1 2019, with 14,993 deals worth USD 574,946 million. Western Europe placed third with 12,721 deals worth USD 539,536 million. In 2019 to date, the banking, insurance and financial services sector notched up the most value with USD 395,577 million, unsurprising given that it has been targeted in deals worth a combined USD 11,989,016 million since the start of 2006, by far and away the largest of any sector. It was followed closely by chemicals, petroleum, rubber and plastics with USD 362,996 million in the period under review, which can be attributed to the sector being targeted in each of the three largest deals of the year so far. During the opening six months of 2019, the computer software sector was targeted in 8,176 deals, making it the most frequently targeted, with other popular industries including business services, industrial, electric and electronic machinery and banking, insurance and financial services. In conclusion, while H1 2019 represents a decline both over the preceding six-month period and on a 12-month comparison, there have still been a significant number of high value deals signed off in the six months under review that have supported value and even pushed investment in North America to the third-highest recorded value for a six-month period on record. If there is an increase in dealmaking in other regions, such as Western Europe and the Far East and Central Asia, H2 2019 could rebound from H1 and still make 2019 a profitable year for M&A. Company: Bureau van Dijk E-Mail: bvd@bvdinfo.com Web: www.bvdinfo.com H1 round-up V H1 2019 represents a decline both over the preceding six- month period and on a 12-month comparison, there have still been a significant number of high value deals signed off in the six months under review that have supported value and even pushed investment in North America to the third- highest recorded value for a six- month period on record.