M&A Trend Summary: H2 2014

MergerMarket Group recently published its January edition of Monthly M&A Insider which reported on mergers and acquisitions activity around the world during the second half of 2014. Among other things, the report explains why 2014 was so hospitable to M&A activity, citing an improving economy, large cash reserves, low interest rates, and cheap financing as contributing factors.

M&A worldwide

Overall, there were 16,588 reported deals in the second half of 2014 worldwide, worth roughly $3.2 trillion; this surpasses the previous record, in the second half of 2007, of 16,060 transactions, worth roughly $3.7 trillion. Just under half of the total value of transactions were based in North America, with one-quarter based in Europe. In terms of volume, one-third of deals were based in North America, roughly two-fifths of deals were based in Europe, and just under one-quarter were based in Asia. The industries with the highest value of deals were, in order, Energy, Mining & Utilities (24.2%), Consumer (12.2%), and Industrials & Chemicals (12.0%). The industries with the highest volume were, Industrials & Chemicals (19.1%), Business Services (13.2%), and Consumer and Technology (tied, 11.8%).

M&A in North America

With respect to North American markets, the Industrials & Chemicals sector was the most active participant in M&A transactions, with 432 deals worth $92.6 billion, but the Energy, Mining & Utilities industry had the highest value, with 353 deals worth $248 billion. The biggest gains were seen in the Leisure industry, with a year-over-year increase of 302% (from $9 billion to $36 billion); the greatest decline was in Telecommunications, from $137.2 billion to $10.6 billion.

Private equity

In the private equity space, there were 2,099 transactions globally worth $489.6 billion, easily surpassing the 2007 high of 1,794 deals worth $403 million. In terms of the highest value of exits, the top three firms were Blackstone Group ($8,100 million, with 1 deal), Apollo Global Management ($6,631 million, with 3 deals), and Thomas H. Lee Partner...