The M&A market continued to contract in September 2015, with some indicators compounding August 2015 declines by over 40%.  In the U.S., overall deal volume (as measured by total dollar value) decreased by 43.47% to $114.51 billion and average deal value decreased by 48.41% to $312.87 million.  Declines were less pronounced globally, where M&A volume (as measured by total dollar value) decreased by 18.62% from August 2015, to $294.54 billion.  Sponsor-related activity fared worse than strategic transactions, decreasing in deal volume by 52.56% globally and by 64.46% in the U.S. and in average deal value by 55.65% globally and by 56.73% in the U.S.  The number of deals also decreased both globally and in the U.S., as compared to August 2015.  We note, however, that the September 2015 M&A market performance was generally comparable to September 2014 (where global M&A volume was $285.46 billion and U.S. volume was $128.35 billion).  Figure 1.

Telecommunications took over as the most active U.S. target industry by volume in September 2015 ($24.37 billion), followed by Computers & Electronics ($21.89 billion).  However, as measured over the last 12 months, Healthcare continues to be the most active industry by volume ($538.10 billion) by a wide margin, more than double the second most active industry, Computers & Electronics ($240.39 billion).  Figure 2. 

September 2015 saw mixed results among global and U.S. crossborder transactions.  Global crossborder transaction volume decreased by 6.13% to $106.23 billion compared to August 2015, while U.S. inbound crossborder transaction volume increased by 23.47% to $58.98 billion over the same period.  Notably, average U.S. outbound deal value decreased by 63.35% to $229.86 million.  Figure 1.  Canada took the lead for inbound U.S. crossborder activity in September 2015 ($21.97 billion in deal volume) and maintained its top position for the number of inbound U.S. crossborder transactions in September 2015 (49 transactions) and outbound U.S. crossborder transactions (28 transactions).  Figure 3. 

In U.S. public merger deal terms, September saw an increase in cash-only transactions, rising to 66.67% of deals, as opposed to 51.74% of deals over the last 12 months.  The incidence of tender offers in September 2015 increased to 27.78%, compared to 23.26% over the past 12 months (Figure 11), and the incidence of hostile offers as a percentage of all mergers was 14.29% in September 2015, compared to 11.58% over the past 12 months.  Figure 8.  Other deal terms, including average break and reverse break fees and number of transactions with go-shops, stayed relatively flat. Figures 7 and 8.

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