Bolstered by record levels of spinoff and divestiture activity, the value of worldwide M&A totalled US$2.6 trillion during full year 2012, a 2% increase from comparable 2011 levels. Worldwide spinoffs and divestitures, which totalled US$1.2 trillion for full year 2012, accounted for 47% of overall M&A activity this year, the highest annual percentage since records began in 1980. Compared to the third quarter of 2012, the value of announced mergers & acquisitions increased 53% during the fourth quarter of 2012.
EMERGING MARKETS ACCOUNT FOR 28% OF M&A; CROSS BORDER UP 6%
Accounting for over one- quarter of worldwide announced merger activity, M&A involving companies located in the emerging markets totalled US$723.0 billion during full year 2012, a 9% increase from 2011. Cross Border M&A activity totalled US$944.1 billion during full year 2012, accounting for 36% of overall M&A volume and up 6% compared to full year 2011. Cross border M&A was driven by the energy & power, industrials, and consumer staples sectors, which comprised 42% of cross-border deal volume during 2012.
COMPLETED ADVISORY FEES DOWN 13% YTD; UP 27% FROM Q3'12
According to estimates from Thomson Reuters/Freeman Consulting, M&A advisory fees from completed transactions totalled US$24.7 billion during full year 2012, a 13% decrease from the comparable period in 2011. Deal activity in the Americas accounted for 58% of the worldwide fee pool, while Europe, Middle East and Africa accounted for 28%. Asia Pacific and Japan contributed 10% and 5%, respectively.
RESOURCES, REAL ESTATE, FINANCIALS LEAD ACTIVITY
The energy & power sector was most active during full year 2012, commanding 18% of announced M&A, while the financials and real estate sectors accounted for 13% and 11% of M&A activity, respectively. Consumer staples and retail deal making led all sectors as to growth rate, up 71% and 38%, respectively, during full year 2012, while materials and high technology registered declines of 22% and 18% over full year 2011.
BUYSIDE PRIVATE EQUITY M&A FLAT COMPARED TO 2011
Worldwide private equity-backed M&A activity totalled US$321.4 billion during full year 2012. Private equity deal making in the energy & power, industrials and financial sectors accounted for 40% of activity during full year 2012. Accounting for 12% of worldwide M&A during 2012, private equity-backed M&A was flat compared to 2011 levels.