Following a slow October, the M&A market strengthened in November, but based primarily on the offers for Allergan, Inc. by Actavis plc ($67.37 billion) and Baker Hughes Incorporated by Halliburton Company ($34.91 billion). Global volume, as measured by total dollar value, increased by more than 65% from the previous month to $374.2 billion, the first month-over-month increase in global volume in the past five months. U.S. volume by total dollar value also increased to $162.40 billion (a 75.8% increase from October 2014). While dollar value has increased this month, the number of transactions declined substantially both globally (dropping 19.4%) and in the U.S. (dropping 24.4%) in November. Figure 1.
Healthcare was the most active U.S. target industry by volume in November, and maintained its lead as the most active U.S. target industry by volume for the last 12 months. Oil & Gas was the second most active U.S. target industry by volume in November with $42.04 billion in deal volume. Figure 2. Global crossborder volume and the average value of deals were both up substantially, while the number of global crossborder deals declined. In the U.S., inbound M&A by deal volume was down by over 46% and outbound M&A by deal volume was up by nearly 80%. Figure 1. France took the top position for inbound U.S. crossborder transactions by deal volume in November ($3.68 billion), while Canada retook its top spot by number of deals, posting 31 transactions during November. The Netherlands and Belgium had a strong November for outbound U.S. crossborder transactions, with $5.46 billion and $4.48 billion in volume, respectively. Figure 3.
Average reverse break fees increased to 5.5% in November, compared to 4.1% in October and 5.0% over the last 12 months. Figure 7. The incidence of tender offers in November increased to 22.2% from 7.7% in October 2014, bringing the percentage in line with the 12-month average of 23.2%. Figure 11. Cash has continued to be a less common form of consideration for the second month in a row (33.3%), when compared with the 12-month average (52.7%). Figure 9. Finally, we note that approximately 11.1% of offers in November were hostile/unsolicited as compared to 16.4% over the last 12 months. Figure 12.
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Ryan D. Blicher, Alison E. Gurr and David C. Rothman