Where the money’s going
- Megadeals dominated; 94 high-value global deals over £5Bn, an 81% increase on 2013;
- Hostile bids increased by 600% from 2013 to 2014;
- Cross-border M&A transactions were at their highest level since 2007;
- Leading sectors were TMT and Life Sciences, closely followed by Energy which had a strong Q1;
- The US and Western Europe, followed by Asia Pacific, were the most active M&A markets; activity in CIS and CEE slowed as a result of the Ukraine crisis.
WHILE merger and acquisitions (M&As) grew last year, the UK was the number one target for US organisations.
Outbound acquisitions by American companies totalled 65 transactions in the UK, hugely out-stripping those in Canada with 28 and Germany with 20. Most of the deals in the US were completed by strategic investors to extend portfolios or to bolt on new areas of growth.
For the calendar year 2014 there were 3,282 deals overall, worth a total of $3.12Tln (£2.64Tln), compared with 2263 deals worth $1.83tn in 2013.
The two regions that drove strong growth in M&A were the US and, despite its sluggish economic environment, Western Europe. The U.S accounted for 34% of all activity by volume and 45% by value.
Andrew Ballheimer, global co-head of corporate at international law firm Allen & Overy, said: “2014 saw the much anticipated return of M&A come to fruition. CEO confidence, relatively cheap financing and low interest rates drove a number of mega, transformative deals. These conditions, along with increasing numbers of hostile takeover attempts, and positive shareholder reaction to M&A, should remain key drivers for deal activity, but there remains uncertainty in the macro-political environment, which may inhibit deal flow.”
