Following years of false dawns and stymied transaction, in which the global M&A dealmaking landscape could best be described as stagnant, 2014 saw a resurgence with CEOs and boards latmching deals on a scale tmseen since the pre-financial crisis days. Deal value in the US alone in the first three quarters of 2014 was almost $1 trillion.
Major announced deals included Comcast's $70bn offer for Time Warner, AT&T gaining DirecTV fuc in a $67bn deal, and the procurement of Allergan by Activas PLC in a $66bn transaction. These represent the top three armounced M&A deals of 2014, according to Thomson Reuters 'Mergers & Acquisitions Full Year Review 2014' .
According to PhilIsom, KPMG's global head of M&A, 2014 was the year in which the lingering effects of the financial crisis were finally shaken off. "Mergers and acquisitions are once again serving as a key strategy to spur growth in almost all global economies. fu 2014, we saw a reversal in the previous downward trend for both completed deal voltnnes and deal values worldwide. This re-emergence of the global M&A market is being driven by favour able economic and fmancial market conditions, and growing confidence among CEOs after years of organi sations cutting costs and focusing on organic growth strategies," he says.
fu its '2015 M&A Report', released in March, WilmerHale puts forward a review of the key M&A trends and developments seen in 2014 and in sights and analysis of the year so far. "Fuelled by improvements in macro economic conditions, high levels of cash among strategic acquirers and low interest rates, the global M&A market produced record or near- record results across most geogra phies and sectors in 20 14", states the report. "The total number of reported M&A transactions world wide increased 17 percent, from 26,939 in 2013 to 31,427 in 2014 - ju st shy of the number of deals in 2007, when the market reached its post-2000 peak. Global M&A deal value surged 57 percent, from $1.87 trillion to $2.94 trillion - the highest level since at least 2000 .The number of worldwide billion-dollar transactions increased 39 percent, from 343 in 2013 to 477 in 2014. Aggregate global billion-dollar deal value grew 74 percent, from $1.12 trillion to $1.95 trillion."
The volume of global M&A activity in 2014 followed two consecutive years of contraction which saw many a deal falter and die. One of the most high-profile of these was the aborted $9.7bn bid by America M6vil for the Dutch telecommunications company, KPN.
Satisfying merger control regimes The WllmerHale report also highlights issues surrounding merger control. A raft of measures have been introduced in recent years which have had a significant impact on the M&A landscape. These include the revisions made annually by the Federal Trade Commission (FTC) to its thresholds for merger control filings and the streamlining of the European Commission 's (EC) merger control procedures in January 2014.
Currently, there are approximately 90 jurisdictions that practice some form of merger control - typically mandatory and suspensory. Satisfying the regulatory requirements of these regimes, which are usually focused on the local effects of a transaction, is essential before a transaction can be considered complete.
"Merger control is an increasing part of the M&A landscape", observes the WilmerHale report. "It is more important than ever that com panies and their counsel be aware of the potential impact of merger control requirements on their transactions and, particularly in strategic and multijurisdictional transactions, take into consideration the timing and valuation implications of those requirements .
"fu any deal, it is important to understand what filing requirements might be triggered and what impact those requirements will have on deal timing, and in strategic deals it is more important than ever to tmderstand the risks merger control im poses . The earlier the parties have information on these two aspects, the more effectively they can address them before merger control becomes a crisis."
With M&A activity in 2015 following on from the resurgence of 2014, the outlook remains positive concludes the WilmerHale Report: "M&A activity in 2015 will depend on a number of factors including the economic conditions, the impact of private equity and the venture capital pipeline. Economic challenges remain, but these factors encourage favotrrable expectations for the global M&A market over the coming year." Mr Isom's also believes the outlook for mergers and acquisitions is very positive as we approach the second half of 2015 . "To realise the lasting results stakeholders expect from M&A, investors must recognise the need for superior strategies , comprehensive due diligence and well-developed integration plans. Doing so will better manage the deal process and make investments a viable and promising growth oppornlnity," he says.