M&A at a Glance (August 2014)

The M&A market in July 2014 generally sustained the robust activity we have seen in recent months.  Although declining slightly from last month, the dollar volume of global M&A deals was again over $325 billion for the third time in the past four months and a departure from the mid-$200 billion figures more common over the previous 12 months.  The total number of deals rose to 3,434 globally, the highest number per month in more than two years.  In the U.S., the upswing in M&A activity was especially noteworthy relative to last summer and earlier this year.  Volume topped $175 billion, the largest monthly total in 2014.  More strategic transactions were announced in July 2014 (725) than in any other month since January 2013 (1,039), and the average value of strategic transactions (nearly $660 million) was the highest since February 2014.  See Figure 1.

For the first time since our publication began in April 2012, Consumer Products appears in our list of the five most active U.S. target industries.  The sector debuted as  the most active U.S. industry by volume, driven by Lorillard, Inc.'s offer for Reynolds American Inc.  In terms of number of deals, Computers & Electronics was the most active U.S. industry in July 2014 with 201 deals.  Figure 2.  In terms of Inbound U.S. Crossborder Transactions, the greatest volume of M&A activity in July 2014 came from France ($36.22 billion), although Canada claimed the top spot for number of deals (31 deals).  With respect to Outbound U.S. Crossborder Transactions, no country distinguished itself by volume.  Canada extended its lead, however, in terms of number of deals (27 deals for July 2014 and 304 deals over the last 12 months).  Figure 3.

Looking solely at mergers involving public U.S. targets valued at $100 million or higher, no U.S. transactions in July 2014 involved a financial buyer.  Figure 7.  In terms of deal mechanics, no deals included go-shop provisions.  Figure 8.  Stock was the most common form of consideration (46.2% of the time), a significant increase over the last 12 months (16.3% of the time).  Figure 9.  Nearly a quarter of offers were hostile or unsolicited in July 2014, compared with 16.1% over the last 12 months.  Figure 12.