Global Deals Intelligence
WORLDWIDE M&A DOWN 16%, QUARTERLY ACTIVITY DOWN 13% - The value of worldwide M&A totalled US$1.7 trillion during the first nine months of 2012, a 16% decrease from comparable 2011 levels. By number of deals, M&A activity fell 14% compared to last year with just over 27,000 announced deals. Compared to the second quarter of 2012, the value of announced mergers & acquisitions fell 13% during the third quarter of 2012, and decreased 3% compared to the third quarter of last year.
EMERGING MARKETS ACCOUNT FOR 28% OF M&A – Accounting for over one-quarter of worldwide announced merger activity, M&A involving companies located in the emerging markets totalled US$465.1 billion during the first nine months of 2012, a 7.1% decrease from 2011. Cross Border M&A activity totalled US$678.9 billion during the first nine months of 2012, accounting for 41% of overall M&A volume and down just 1% compared to the first nine months of 2011. Cross border M&A was driven by the energy & power, consumer staples, industrials and financial sectors, which comprised 51% of cross-border deal volume during 2012.
COMPLETED ADVISORY FEES DOWN 22% YTD; DOWN 13% FROM Q2'12 - According to estimates from Thomson Reuters/Freeman Consulting, M&A advisory fees from completed transactions totalled US$17.7 billion during the first nine months of 2012, a 22% decrease from the comparable period in 2011. Deal activity in the Americas accounted for 57% of the worldwide fee pool, while Europe, Middle East and Africa accounted for 28%. Asia Pacific and Japan contributed 10% and 5%, respectively.
RESOURCES, FINANCIALS LEAD ACTIVITY - The energy & power sector was most active during the first nine months of 2012, commanding 17% of announced M&A, while the materials and financials sectors accounted for 12% and 11% of M&A activity, respectively. Just two sectors, retail and consumer staples, have registered year- over-year gains compared to the first nine months of 2011. Healthcare and financials deals led the decliners, down 34% and 31%, respectively, during the first nine months of the year.
BUYSIDE PRIVATE EQUITY M&A DOWN 7% FROM 2011 – Worldwide private equity-backed M&A activity totalled US$190.1 billion during the first nine months of 2012. Private equity deal making in the high technology, energy & power and industrials sectors accounted for 37% of activity during the first nine months of 2012. Accounting for 11% of worldwide M&A during 2012, private equity-backed M&A decreased 7% compared to 2011 levels.
US M&A Decreases 22% | Canadian Activity Up 36% | Energy and Power Leading Sector
Americas Deals Intelligence
M&A activity with US involvement during the first nine months of 2012 decreased 21.5% compared to the same period last year, reaching US$784 billion. The number of US-invovled M&A transactions decreased by 13.5%, dropping from 8,790 to 7,605 announced deals.
According to Thomson Reuters/Freeman Consulting estimates, the total fees from completed M&A activity in the Americas reached $12.1 billion during the first nine months of 2012, a 17.7% decrease from the $14.7 billion earned in the same period last year.
While announced M&A activity with Canadian involvement increased by 36.3% during the first nine months of 2012 as compared to the same period in 2011, completed activity in Canada fell by 10.1% during the period. With respect to deal count, both completed and announced M&A activity with Canadian involvement decreased, by 18.1% and 14% respectively.
The Energy & Power sector led the US market, with deal volume totaling US$118.14 billion, a 19.9% market share and a 30.3% decrease compared to the same period last year. Healthcare placed second, with US$79.4 billion, a 13.4% share. By deal count, high Technology was the most prolific sector, with 1,145 transactions.
On average, EBITDA multiples for Americas Targets during the first nine months of 2012 decreased to 11.9x from the 13.5x reported in the first nine months of 2011. From an industry perspective, among US target transactions, average industry multiples ranged from 9.1x for Telecommunications to 16.6x for Real Estate targets.
EMEA Announced M&A Down 9% While Fees from Completed M&A Down 35% | Financials Most Active Sector | Goldman Sachs in First Place
EMEA Deals Intelligence
Announced M&A activity with EMEA involvement totalled US$723.7 billion in the first nine months of 2012, an 8.5% decrease compared to the same period last year, with third quarter volumes dropping 41.6% from the previous period. EMEA fees accumulated on deals completed thus far in 2012 reached US$6.8 billion, a 35.4% decrease compared to last year, according to estimates from Thomson Reuters/Freeman Consulting.
Financials, the most active sector with 1,426 deals, grossed a combined US$101.6 billion. Materials, second, accrued US$97.3 billion. Energy and Power finished third, with US$91 billion worth of activity.
EMEA targeted buyside financial sponsor activity reached only US$52.4 billion, falling far short of the US$75.8 billion reported last year, and emerging as the least active quarter since the second quarter of 2010. The US$2.8 billion buyout of the German firm Elster Group remains the largest deal yet in 2012.
London listed EMEA companies were the most acquisitive this year, extending a combined total of US$82.2 billion in offers. While the US$46 billion Xstrata / Glencore transaction accounts for a large portion of M&A activity, completion of the BAE / EADS deal has the potential to increase that volume significantly.
Asian M&A Recovers I Fees Earned Drop 31% I Australian M&A Plummets 58%
Asia Pacific (ex-Japan) Deals Intelligence
In the first nine months of 2012, M&A activity with Asian involvement increased 6.8%, to US$342.3 billion from the US$320.5 billion recorded during the same period last year. Companies in the Energy & Power sector were the most sought after, accruing US$58.8 billion in activity from 456 deals. The Materials sector reached US$51.5 billion in value, and activity in the Financials sector amounted to US$40.7 billion from 737 deals.
Estimated buy-side and sell-side banking fees earned in the region totaled US$1.7 billion, a 31.1% decrease from totals recorded in the comparable period last year, according to Thomson Reuters/Freeman Consulting. Citi, the top earner, accumulated US$78.3 million in fees, a 4.6% wallet share. Goldman Sachs & Co placed second, grossing US$72.8 million. UBS was at third with US$67.7 million.
China outbound activity in the third quarter of 2012 increased by 34% compared to the same period last year, reaching US$44.5 billion and the highest volume recorded since 2008. China cross border activity for the first nine months of 2012 reached US$62.4 billion, falling just short of the US$64.4 billion reached during the first nine months of 2011.
Australian M&A activity amounted to US$63.8 billion, a 57.5% decline from the US$150.2 billion grossed throughout the first nine months of 2011. Australia cross border activity totaled US$33.2 billion, down 57.9% from the same period last year and the lowest volume since 2004. Foreign companies invested US$10.1 billion in the Australian Materials sector, representing 34.4% of inbound volume.
Japanese M&A down 12% | Energy and Power Leads Activity | Domestic Deals At 10 Year Low
Japan Deals Intelligence
The first three quarters of 2012 saw M&A activity with Japanese involvement at US$116.6 billion from 1,966 deals, a 12.3% decrease compared to the same period in 2011.
Energy & Power was the most active sector with 71 deals worth a combined US$25.5 billion. The top three deals driving activity in the sector were Nuclear Liability’s US$12.6 billion acquisition of TEPCO’s majority shares, Tonen General Sekiyu’s acquisition of Exxon Mobil Yugen Kaisha for US$3.9 billion, and Japan Australia’s US$2 billion stake acquisition in the Browse LNG Project of Woodside Browse.
Domestic Japanese deals recorded the lowest first nine months volume since 1999, with a combined value of US$46.2 billion from 1,382 deals.
About 45.3% of Japanese involvement activitiy was generated from outbound deals, with values reaching US$53.8 billion, the highest first three quarters volume since 2009. Inbound activity recorded a total of US$12.9 billion in value from 123 deals, the highest outbound volume since 2008.
According to Thomson Reuters/Freeman Consulting, total estimated fees generated from completed Japanese involvement deals reached US$1.4 billion, a 26% increase compared to the same period in 2011.