Global M&A deal value remained static for the third time in a row with the deal value for 2013 falling to $2,215 billion.
Mergermarket in its M&A trend report for 2013 points out that despite a third quarterly increase during 2013, the fourth quarter witnessed a drop in deal value.
Lackluster growth for M&A in fourth quarter
According to the Mergermarket report, M&A confidence was building every quarter throughout 2013 and peaked in September when total deal values surpassed 2012’s like-for-like period for the first time. However, the fourth quarter witnessed a 12.7% drop in the deal value to $570.5 billion against $653.7 billion in deals reported during the third quarter.
The Electron Global Fund was up 2% for September, bringing its third-quarter return to -1.7% and its year-to-date return to 8.5%. Meanwhile, the MSCI World Utilities Index was down 7.2% for September, 1.7% for the third quarter and 3.3% year to date. The S&P 500 was down 4.8% for September, up 0.2% for the third Read More
The following graph highlights quarterly M&A growth comparison since 2007:
As can be deduced from the above graph, despite lackluster fourth quarter performance, H2’s deals valued at $1,224.2 billion overtaking H1 value of $990.8 billion representing a 23.6% jump thanks to a pre-Christmas dash to announce deals.
The report highlights that 2013 has been the slowest year since 2010 which witnessed deal value of $2,089.6 billion. The report points out that mega deals totaling $397.7 billion, Verizon’s $124.1 billion value, a U.S. recovery and the lowest number of lapsed bids on record, have failed to spur on significant growth.
Goldman retains top position
According to the Mergermarket report, Goldman Sachs retained the leading position since 2009 with deals valued at $604.5 billion and ranked first in the U.S. and Europe.
The table below captures the top global deals recorded during 2013:
The following table provides a snapshot of global league table for 2013 with Goldman Sachs Group Inc (NYSE:GS) topping the league table with 304 deals.
Private equity buyouts and exits
The Mergermarket report highlights global buyouts during 2013 were flat at $271.1 billion as against $270 billion clocked in 2012, after two quarterly decreases and no mega-deals during the fourth quarter. UBS Investment bank advised on two of the largest buyouts and topped the financial advisor rankings by value with deals worth $44.8 billion.
The following graph provides geography breakdown of private equity buyouts:
As far as PE exits are concerned, a slowdown for secondary buyouts in the fourth quarter contributed to 2013’s exit activity at $270.8 billion witnessing a second annual decline in value.
Turning its focus to the average deal size, the Mergermarket report highlights that Q4’s three mega deals totaling $54.5 billion resulted in the lower value for mega-deals since Q4 2011 with a 4.2% decline in 2013’s average deal size. The global average deal size during 2013 reversed two annual increases.
Interestingly, Asia-Pacific (excluding Japan) witnessed the highest value on Mergermarket record in 2013 with $403.4 billion, representing an increase of 15% from 2012 value of $350.9 billion.
As far as Japan is concerned, infrastructure M&A more than doubled in value to $7.8 billion from the same time last year as restructuring for the 2020 Olympic games begins.