The holiday season saw a slow-down in the M&A market. Global volume, as measured by total dollar value, decreased in December 2014 from the previous month to $287.37 billion (a 20.3% decrease). U.S. volume decreased 43.2% to $92.48 billion. There was also a 13.4% decrease in the number of transactions in the U.S (683), which ties with a yearly low set in February 2014. The average volume of deals in the U.S. fell to $345.1 million in December 2014 with most of the decline stemming from fewer and relatively smaller U.S. strategic transactions. Figure 1.
Real Estate & Property was the most active U.S. target industry by volume in December 2014 ($16.44 billion), closely followed by Healthcare ($15.96 billion) and Computers & Electronics ($15.87 billion). Healthcare finished the year as the most active industry ($305.36 billion) by a wide margin, while Computers & Electronics totaled the most number of deals over the last 12 months. Figure 2. With respect to inbound U.S. crossborder transactions, Singapore took the top position by deal volume in December 2014 ($9.58 billion) driven by Blackstone Group LP's agreement to sell IndCor Properties for $8.1 billion to Global Logistic Properties Ltd and GIC Pte Ltd., while Canada maintained its top spot by number of deals (which it has dominated for the last 12 months). The United Kingdom had a strong
December for outbound U.S. crossborder transactions with $6.00 billion in volume. Figure 3.
Off the heels of November 2014's record-setting offer for Allergan, Inc. ($67.37 billion), the market in December 2014 for mega-deals was relatively tepid, with the largest U.S. public merger of the month being the $8.25 billion offer for PetSmart, Inc. by Henry Crown & Co., The Caisse de depot et placement du Quebec, StepStone Group Holdings LLC and BC Partners Ltd. Figure 5. The absence of mega-deals was consistent with the overall decline of strategic transactions globally and in the U.S. (as measured by dollar value), with the dollar value of global strategic transactions down 27.9% and U.S. strategic transactions down 65.1%. Figure 1.
Average reverse break fees decreased to 4.4% in December 2014, compared to 4.8% over the last 12 months. Figure 7. The incidence of tender offers in December 2014 increased to 31.3%, approximately 10% higher than the 12-month average. Figure 11. Finally, we note that approximately 5.9% of offers in December 2014 were hostile/unsolicited as compared to 15.9% over the last 12 months. Figure 12.
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Ryan D. Blicher, Alison E. Gurr and David C. Rothman