Fewer but Larger Deals
The first half of 2019 has been flush with megadeals, but the number of U.S. deals announced in the period is at levels last seen in 2011 and 2012. According to Dealogic, there have been 431 mergers or acquisitions between U.S. parties worth a total of $919 billion announced so far this year versus 1,065 such transactions worth a total of $1.4 trillion in 2018. (All 2019 figures include only deals of $100 million or more announced between Jan. 1 and June 19.)
The largest deal announced so far this year, Bristol-Myers Squibb Co.‘s (BMY) $74 billion agreement to buy Celgene Corp. (CELG), came in healthcare, a sector on pace for about $500 billion in M&A activity this year, which would be the most since at least 2008, though the number of deals would be down modestly from last year. Two other significant deals have been announced in the sector so far this year: AbbVie Inc.‘s (ABBV) $63 billion agreement to buy Allergan plc (AGN); Danaher Corp.‘s (DHR) $21.4 billion agreement to buy General Electric Co.‘s (GE) biopharma division and Centene Corp.‘s (CNC) $17.3 billion agreement to buy WellCare Health Plans Inc. (WCG)
Technology M&A is on pace for its best year in the last decade, with 141 deals worth a total of $216 billion announced in 2019. The three largest tech deals have all come in payments processing, with Fidelity National Information Services Inc. (FIS) agreeing to pay $43 billion for Worldpay Inc. (WP); Fiserv Inc. (FISV) agreeing to pay $39 billion for First Data Corp. (FDC); and Global Payments Inc. (GPN) agreeing to pay $26 billion for Total System Services Inc. (TSS)
Real estate and oil and gas are much less vibrant. Occidental Petroleum Corp.‘s (OXY) $50 billion agreement to buy Andarko Petroleum Corp.(APC) accounted for 45% of the 2019 dollar volume in oil and gas, where deal volume is at 2009 levels thanks to depressed commodity prices. And U.S. real estate M&A activity is at levels last seen in 2010 and 2011, though Dealogic’s data does not include Blackstone Real Estate’s $18.7 billion agreement to buy assets from Global Logistics Properties.
The PE figures show the same pattern as those in M&A: fewer deals, but larger ones. There were 221 U.S. PE deals worth a total of $221 billion from Jan. 1 to June 21, which would be the most activity by dollar volume since at least 2008 but a level of deal activity on par with 2011. Dealogic’s figures include Fiserv’s agreement to buy First Data, since KKR & Co. Inc. is divesting its Fiserv stake in the deal. Even excluding that deal, PE in the U.S. is on pace to match last year’s $356 billion in deal activity.
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