United States: 2014 M&A Report

Market Review and Outlook


Global M&A deal volume declined for the second consecutive year in 2013. The total number of reported M&A transactions worldwide contracted 8%, from 28,601 in 2012 to 26,409 in 2013. Global M&A deal volume was unchanged, at $1.87 trillion in both years, after four consecutive years of growth.

Aggregate global deal volume increased over the last three quarters of 2013, but the fourth quarter tally of 7,053 deals was still 4% below the quarterly average that prevailed in 2011 and 2012.

The number of worldwide billion-dollar transactions decreased 3%, from 353 in 2012 to 342 in 2013. Aggregate global billion-dollar deal value grew 4%, from $1.08 trillion in 2012 to $1.13 trillion in 2013.

Deal volume declined across all geographic regions in 2013, and only the United States showed growth in deal value:

  • United States: Deal volume in the United States declined 11%, from 9,963 transactions in 2012 to 8,873 in 2013. US deal value, however, posted a 14% increase, from $860.9 billion in 2012 to $979.2 billion in 2013, resulting in a 28% increase in average deal size from $86.4 million to $110.4 million. The number of billion-dollar transactions involving US companies decreased by 9%, from 216 in 2012 to 197 in 2013, while the aggregate value of these transactions grew 22%, from $606.6 billion to $742.2 billion.
  • Europe: European deal volume and value both declined in 2013. The number of transactions fell 6%, from 11,612 in 2012 to 10,943 in 2013, while deal value dropped 18%, from $785.6 billion to $645.6 billion. The number of billion-dollar transactions involving European companies edged down from 164 in 2012 to 161 in 2013, while their aggregate value declined 6%, from $590.5 billion to $557.1 billion.
  • Asia-Pacific: The Asia-Pacific region saw deal volume decline 8%, from 8,808 transactions in 2012 to 8,113 in 2013. Aggregate deal value in the region fell 9%, from $497.1 billion in 2012 to $452.1 billion in 2013. Billion-dollar transactions involving Asia-Pacific companies increased 6%, from 83 in 2012 to 88 in 2013, while their aggregate deal value fell 20%, from $247.3 billion to $196.6 billion.

Results varied across principal industry sectors in 2013. The financial services sector turned in a comparatively weak performance, while large transactions fueled strong results in other sectors:

  • Financial Services: Global transaction volume in the financial services sector dipped 3%, from 1,237 deals in 2012 to 1,200 deals in 2013. Aggregate global financial services deal value fell 30%, from $138.3 billion in 2012 to $96.5 billion in 2013. In the United States, financial services sector deal volume decreased 4%, from 440 in 2012 to 423 in 2013, while deal value fell 37%, from $38.8 billion to $24.6 billion.
  • Technology: Global transaction volume in the technology sector declined 7%, from 4,104 deals in 2012 to 3,807 deals in 2013, while aggregate global technology deal value increased 21%, from $117.8 billion to $142.5 billion. US technology deal volume declined 14%, from 2,181 in 2012 to 1,877 in 2013. US technology deal value enjoyed a 25% increase, from $82.5 billion to $103.1 billion, with a boost from Dell's $24 billion acquisition by Michael Dell and private equity firm Silver Lake Partners.
  • Telecommunications: Global transaction volume in the telecommunications sector increased 11%, from 696 deals in 2012 to 775 deals in 2013. Buoyed by one of the largest M&A transactions of all time— the buyout of Vodafone's 45% stake in Verizon Wireless for $124.1 billion— aggregate global telecommunications deal value soared 119%, from $112.0 billion in 2012 to $245.6 billion in 2013. US telecommunications deal volume fell 10%, from 266 in 2012 to 240 in 2013, but deal value more than tripled from $48.2 billion to $153.0 billion.
  • Life Sciences: Global transaction volume in the life sciences sector increased 3%, from 1,046 deals in 2012 to 1,074 deals in 2013. Aggregate global life sciences deal value jumped 39%, from $95.9 billion to $133.8 billion. US life sciences deal volume declined 13%, from 446 in 2012 to 390 in 2013, while deal value increased 40%, from $70.5 billion to $98.7 billion. The largest life sciences M&A transaction of the year was Thermo Fisher Scientific's $13.6 billion acquisition of Life Technologies, followed by the $10.4 billion acquisition of Onyx Pharmaceuticals by Amgen and the $8.7 billion acquisition of Bausch + Lomb by Valeant Pharmaceuticals.
  • VC-Backed Companies: Unlike the ebullient market for VC-backed IPOs, the M&A market for venture-backed companies contracted for the third consecutive year in 2013. The number of reported acquisitions of VC-backed companies declined by 9%, from 456 in 2012 to 413 in 2013, and total proceeds fell 14%, from $43.0 billion to $36.9 billion.

Click here to view the 2014 M&A Report in its entirety.

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Benjamin A. Powell
Lillian Howard Potter
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