The global M&A market contracted in February 2015 for the third consecutive month. While the U.S. M&A market showed a slight increase from last month, the volume of deals still remains lower than the trend over the last six months. The global declines were relatively benign: global volume declined by 2.6% to $245.6 billion, and global average deal value declined by 6.2% to $177.6 billion. February 2015's data indicate that the past year's M&A momentum has slowed. By comparison, from July 2014 through December 2014, monthly global volume was on average 22.5% higher and deal value was 17.7% higher, in each case, compared to February 2015. The picture is slightly brighter on the U.S. side; U.S. volume rose 43.7% to $113.8 billion and U.S. average deal value rose 26.5% to $368.2 billion. The growth stemmed from larger U.S. strategic transactions on average, although the overall number of U.S. transactions declined by 10.5% to 783 in February 2015. While February 2015 saw a slight increase in sponsor related M&A activity, the overall volume continues to underperform. Figure 1.
Healthcare was the most active U.S. target industry by volume in February 2015 ($37.5 billion), followed by Telecommunications ($16.1 billion) and Computers & Electronics ($9.9 billion). Healthcare continues to be the most active U.S. target industry by a wide margin for the last 12 months ($313.4 billion in deal volume). Figure 2.
Both global and inbound U.S. crossborder transaction volume rose in February 2015 by 58.4% to $109.9 billion and 81.2% to $30.3 billion, respectively. However, the overall number of global and inbound U.S. crossborder deals declined by 4.1% and 10.4%, respectively. Figure 1. With respect to inbound U.S. crossborder transactions, Canada took the top position by deal volume ($14.8 billion) and number of deals (20). The United Kingdom maintained its top position for outbound U.S. crossborder transactions with $10.1 billion in volume, tying with Canada for 28 deals in February 2015. Figure 3.
The largest U.S. public merger in February 2015 was the $15.4 billion offer for Hospira, Inc. by Pfizer Inc. Figure 5. Average reverse break fees rose to 5.9% in February 2015, compared to 4.6% for the last 12 months. Figure 7. For the second month in a row, no U.S. public mergers in February 2015 had a go-shop provision, which might be a result of the decline in financial buyer activity. Figure 8. No U.S. mergers used stock as the only consideration in February 2015, compared to 16.1% for the last 12 months. Figure 9. The incidence of tender offers in February 2015 declined to 23.1%, falling in line with the 12-month average. Figure 11. Finally, we note that 7.1% of offers in February 2015 were hostile/unsolicited, compared to 13.1% for the last 12 months. Figure 12.
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