Global TMT M&A Deals Spurred By Big Companies

TMT in global M&A

During the first half of 2014, global TMT (technology, media and telecom) M&A witnessed deals worth $383.4 billion, showing a 122% increase from H1 2013, notes a recent report from Mergermarket.

Analyzing the global TMT M&A trend during H1 2014, the Mergermarket report highlights that H1 2014 marks the highest half-year value on Mergermarket record since 2001.

Burgeoning growth in TMT sector

The Mergermarket report noted that the TMT sector retained its top position in the global industry table, with a 24.3% market share and 265 more deals as compared to H1 2013. This is set forth in the following graph:

As can be deciphered from the following graph, TMT deals during Q2 2014 totaled $200.9 billion, which is three times the total value of deals in Q2 2013 and up 10.1% from the $182.5-billion worth of deals clocked in Q1 2014.

Quarterly TMT M&A Trend

In terms of deal count, the report pointed out that the deal count in the sector has more or less risen for four consecutive quarters from Q1 2014, though it experienced a slight dip in Q1 2014. However, the report noted that the media industry was the only sub-sector that underperformed compared to H1 2013.

High values spurred TMT values

The Mergermarket report highlights the following top deals witnessed during H1 2014:

Top deals M&A

According to the report, the high valuations of telecom companies have spurred the increased TMT values. For instance, during 2014 so far, 10 deals were reported above $5 billion in market ap in the telecom sub-sector. The report cites the $68.5 billion Time Warner Cable Inc (NYSE:TWC) acquisition by Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) as the top deal.

North America has the highest contribution to TMT M&A

Moreover, with five of the TMT deals being U.S.-based, North America had the highest contribution to global TMT activity at 62%.

Taking a closer look at the sub-sector, the Mergermarket report points out that technology deals continue to represent a substantial amount of TMT activity.

Sub-sector breakdown by region M&A

The report also highlights that the Asian technology sector is likely to witness significant activity levels, particularly in China, where Alibaba, Tencent Holdings Ltd (HKG:0700) (OTCMKTS:TCEHY), Baidu Inc (ADR) (NASDAQ:BIDU) and other large players are extremely active in identifying and pursuing strategic areas for expansion through acquisitions. The following graph captures the quarterly geographic breakdown:

Geography breakdown M&A

Delving deep into the league table, the Mergermarket report points out that Morgan Stanley tops the financial advisor rankings by value and volume with 25 deals worth $164.3 billion:

Financial advisor-by value M&A

As can be seen from the following table,  Simpson Thacher & Bartlett topped the TMT legal advisor table, clocking 21 deals worth $173.3 billion.

Legal advisor-by value M&A

Citing Mergermarket Intelligence, the report concludes that this year and 2015 will be the era of in-market telecoms consolidation, with Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD)’s short-term acquisition strategy focused on smaller deals.

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About the Author

Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports