July 5-11 Was Another Busy Week for M&A: Bloomberg

According to the July 14th edition of the Bloomberg Brief “Mergers”, the week of July 5-11 was another active one in M&A circles. Editor John E. Morris offers a pithy summary in the overview of the publication: “Deal activity rebounded last week after the anemic pace of the prior week, which was shortened in the U.S. due to the July 4 holiday.”

Two large M&A deals announced last week

Morris highlights that there was official confirmation of two large rumored deals by the end of last week. Tobacco giant Reynolds American, Inc. (NYSE:RAI) and rival Lorillard Inc. (NYSE:LO). confirmed they were discussing a potential merger. Lorillard had an enterprise value of about $26.7 billion as of late Friday, following confirmation of negotiations. Earlier in the week it was also announced that Germany’s ZF Friedrichshafen AG is planning to acquire U.S. parts maker TRW Automotive Holdings Corp. (NYSE:TRW) in a deal valued around $12.5 billion including debt.

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In total, seven deals more than $1 billion were announced in the seven days through July 11, including AbbVie Inc (NYSE:ABBV)’s long-running cash-and-stock offer for Shire PLC (ADR) (NASDAQ:SHPG) (LON:SHP), which continues to creep up to a valuation of $54.7 billion as of this Monday morning.

Torrid summer of M&A continues

m&A dealmaking pace

The Mergers Bloomberg Brief also highlighted that were less over $1 billion deals last week than in recent weeks and no new transactions greater than $3.1 billion, but otherwise there were few signs of a summer lull. Morris also noted that this week’s $85.6 billion global deal total was significantly higher than the weekly average of $64 billion so far in 2014.

M&A week by week

Regional breakdown of deals

m&a regional breakdown

The top five largest deals announced or amended last week had European targets, and seven of the top 10 targets were in Europe. On the other hand, U.S. buyers were behind three of the five largest deals, including AbbVie Inc (NYSE:ABBV)’s finally consummated pursuit of Shire. Archer Daniels Midland Company (NYSE:ADM) also agreed to acquire Wild Flavors GmbH food flavorings from the founding family, and KKR & Co. L.P. (NYSE:KKR) and Whirlpool Corporation (NYSE:WHR) inked a deal to buy 60% of Italian appliance maker Indesit Company SpA (BIT:IND) (OTCMKTS:IDTCF) from controlling shareholders. Related to this, Whirlpool stated its intention to purchase the remaining 40% from public shareholders.