Offshore-i: Quarter Four 2014 Report On Offshore M&A

FOURTH QUARTER 2014

In this quarter we report that while M&A volumes and values may remain choppy in most regions of the globe, including the United States, the offshore market has enjoyed a bumper 2014. In fact, our analysis reveals several new peaks in the market, and highlights the sectors and jurisdictions that are proving to be the engine rooms of an increasingly bullish market.

The fourth quarter of last year saw the announcement of 628 deals, worth a cumulative USD69.2bn. Whilst activity levels were on a par with previous quarters, values were higher, with the quarter the second highest by value in what was an exceptional year. The average deal size in the quarter was USD110m, a number overshadowed in only four quarters over the past 11 years, and making the year as a whole the largest on record by that measure, at USD103m.

As always, we are ever aware of the role that a small number of mega deals can play in bumping up quarterly totals. These mega deals are, of course, to be welcomed, and there were two such transactions – worth north of USD5bn – in the fourth quarter, after three in the first half of 2014.

Really big deals are once again happening, and they often place offshore entities centre stage. When we take the temperature of offshore as gainst other world regions, it is heartening to see our markets ranking fourth for deal value in this quarter behind North America, Western Europe and the Far East and Central Asia); ranking sixth for the number of deals; and enjoying third place by average deal size, behind only North America and South and Central America.

FULL YEAR 2014

The year 2014 is a standout year for offshore M&A and IPOs for many reasons. Most notably, we see aggregate deal value for the year up 63% on 2013, with USD277bn spent on offshore deals as against USD170bn in the previous 12 months. What's more, 2014 is the highest year on record for total deal value by some distance: in the past decade, only four years have seen aggregate deal value top USD200bn, and the next highest figure was recorded in 2007, when USD239bn was spent on offshore targets. The number of deals, (2,687) is broadly consistent with an average north of 2,500 that we have seen since 2007, but still ranks third for the past 10 years, behind volumes recorded in both 2009 and 2010.

A further positive message emerges when we look at offshore acquirer deals. These are deals where the acquisitive party is based offshore, although their target might not...