TMT Market Sees Highest Share In Global M&A Pie Since 2001

TMT Market Sees Highest Share In Global M&A Pie Since 2001

Technology, Media and Telecommunication (TMT) deals until July 29, 2013 contributed 21.7 percent to global M & A, a record since 2001.

Mergermarket in its recent TMT M&A trend report reveals TMT deals till July 29, 2013 amounted to $232.5 billion, sharing 21.7 percent in the total global M&A pie of $1,072.3 billion. TMT’s market share was just 13 percent in 2012’s comparative period.

TMT has posted strong performance during 2013, despite weak performance seen by the overall M&A activity.

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Over 38 percent share during Q3 first month

A few days back, Omnicom Group Inc. (NYSE:OMC) announced its merger of equals agreement with Publicis Groupe S.A. (ADR) (OTCMKTS:PUBGY) (EPA:PUB) to create the largest advertising, communications, digital services and marketing firm worldwide.

This largest advertising company in the world deal catapulted TMT deal value in the first month of Q3 to have a whopping 38.3 percent of total global M&A in the same period.

Top 3 deals

LIBERTY GLOBAL PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB)’s acquisition of Virgin Media Inc. (NASDAQ:VMED) (LON:VMED) Inc for $24.983 billion, Michael Dell’s $20.169 billion buyout plan and Publicis Groupe S.A. (ADR) (OTCMKTS:PUBGY) (EPA:PUB)’s $20.529 billion deal with Omnicom Group Inc. (NYSE:OMC) standout among the top deals and cumulatively contributed $65.7 billion. These three deals alone contributed 28.3 percent to global TMT M&A to-date in 2013.

Smaller numbers, larger value

The year 2013 so far has seen TMT deals recording substantial dollar values on top of lower number of deals.

Europe targeted TMT deals in 2013 surpassed the full year value in 2012, by posting 16.2 percent jump to $77.6 billion in 400 deals. This is in comparison to 2012’s $66.5 billion in 707 deals.

Echoing similar trend, the U.S. too saw 358 deal announcements till date in 2013 as against 467 deals recorded in the same period last year. However, the deal value increased a whopping 91.9 percent on last year to $123.2 billion from $64.2 billion.

The sharp increase in TMT deal values on top of small numbers is evidenced from the following graph as well:

Global TMT Trend

Mergermarket data reveals, based on the acquisitions made by large tech companies such as Apple, Intel, Samsung, in the last five years, the media companies such as Comcast Corporation, Walt Disney and AT & T tend to pay higher values for companies at an average deals size of $819.3 million, compared to $139.7 million by the included technology companies.

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