Jan 7, 2020

Global merger and acquisition activity decreased in 2019

Dan Primack, author of Pro Rata

Global merger and acquisition activity hit $3.9 trillion in 2019, according to Refinitiv.

Why it matters: That represents a 3% decrease from 2018, but was still the fourth-largest dollar volume in history and sixth straight year above $3 trillion.

  • Record-high stock markets and laughably-low interest rates proved more compelling than rising regulatory, geopolitical, and trade uncertainties.

Activity was driven by mega-deals, or transactions valued at more than $10 billion.

  • Mega-deals represented 31% of the global total, a sizable jump from 2018 and the largest-such percentage since 2015 (the busiest-ever year for M&A).
  • This trend also is reflected in how the number of deals decreased 5% year-over-year, and represented a 3-year low.

U.S. deal activity was another upward driver, hitting $1.8 trillion.

  • That's a 6% rise over 2018, and includes 15 of the year's 20 largest announced transactions.
  • The year's largest deal was in the U.S. healthcare sector (+26% year-over-year), with Bristol-Myers Squibb buying Celgene for $74 billion.

Europe and Asia-Pacific (ex-Japan) volume fell 25% and 14%, respectively.

  • Cross-border deals were off 25%, hitting its lowest volume in five years.

The bottom line: 2019 was bolstered by a busy fourth quarter, and it wouldn't be surprising to see that extend a bit into 2020. But then all bets are off — particularly in a presidential election year that could cause some bulls to slow their stampede.

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