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M&A Year-End Roundup: 2012
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- January 17, 2013
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M&A deal volume over the last three years has been
surprisingly consistent across multiple sectors. The volume of
sponsor-related transactions outside of the United States was an
exception, spiking in 2011 before dipping below 2010 levels in
2012. We surmise that this may be due to the dependence of sponsor
transactions on credit and the volatility in global credit markets
over the last few years. (See Figure 1.)
The Oil & Gas, Healthcare, and Computers & Electronics
sectors have consistently established themselves as leaders in deal
volume, although the Real Estate/Property sector has seen
significant gains since 2010. (See Figure 4.)
Over the past three years, crossborder transactions inbound to and
outbound from the United States have consistently shown the
greatest volume and number of deals with countries that have
similar cultures and legal systems to the United States (e.g., the
U.K. and Canada). However, Brazil remains a top target for U.S.
investors, as it appears to be very receptive to foreign
investment. (See Figure 3.)
U.S. public mergers have seen a small but steady increase in all
cash transactions (with a concomitant decrease in the number of all
stock deals). (See Figure 5.) We note the large decline from 2011
to 2012 in hostile and unsolicited offers as a percentage of U.S.
public mergers, although we surmise that this is not necessarily
indicative of a decrease in shareholder activism, but rather due to
activists advocating M&A transactions at their targets but not
undertaking hostile M&A activity themselves. We would expect
that such activism will continue to increase in 2013. (See Figure
8.)
In 2011 and 2012, the percentage of mergers involving financial
buyers that had go-shops stabilized around one-third, lower than
the 48.8% of 2010. The high percentage in 2010 is likely a product
of uncertain economic conditions, but the fact that one-third of
U.S. public company mergers with a financial sponsor over the last
two years involve a go-shop is an indicator that many financial
sponsors successfully resist having their deals shopped prior to
announcement and that board of directors are comfortable using
go-shop provisions in carrying out their Revlon duties. (See Figure
9.)
» for more information, please read our M&A at a Glance: M&A Year-End Roundup