Mega Deals Drive Rise in Deal Volume, But Bring Outsized Risk

Large Transactions

Mega deals worth more than $10 billion have skyrocketed over the last six quarters. In 2015, more mega deals were announced than in the previous three years combined (53 versus 43). This increase was a significant driver of the record M&A year in 2015.

Indeed, deals exceeding $10 billion have largely driven the increase in deal volume over the last four years. Mega deals made up 45.5 percent and 57.3 percent of the total deal volume in 2014 and 2015, respectively.

Acquirers have announced M&A transactions in excess of $10 billion for 114 U.S. targets since January 1, 2012. Of these, 72 were announced between Jan. 1, 2015 and June 30, 2016.

While the pace for mega deals is behind that set in 2015, there are nearly as many M&A transactions in excess of $10 billion involving U.S. targets in the first half of 2016 (19) as there were in all of 2014 (24).

Deal Risk

However, the mega deal does not come without risk. Over 28 percent of mega deals announced between the start of 2012 and mid-2015 were terminated or withdrawn. During that same period, less than 5 percent of M&A transactions valued between $100 million and $10 billion suffered the same fate.

The above analysis is based on an examination of data pulled from our Bloomberg Law: Corporate Transactions platform regarding announced mergers and acquisitions valued in excess of $100 million involving U.S. targets over the last four-and-a-half years.

For more on the latest trends in M&A, please see our Quarterly M&A Market Update.