The Rise (and Fall?) of Mega Deals

Mega Deals 2016

Between 2012 and 2015, acquisitions of U.S. targets trended upward, with a 26 percent increase in deal count and a 222.8 percent increase in deal volume, according to Bloomberg Law data.

Those numbers were largely driven by an increase in mega deals, which exploded in 2015.  In 2015, the number of deals announced with a value in excess of $10 billion reached 54, which was more than the previous three years combined.

The number of mega deals announced per quarter, however, has leveled off this past year, ranging from six to eight per quarter in 2016.  As a result, the number of mega deals involving U.S. targets announced in 2016 (32) decreased 40.7 percent from 2015.

Overall, acquirers have announced mega deals for 129 U.S. targets since Jan. 1, 2012.  Of these, 86 (66.7 percent) were announced in 2015 and 2016.  Interestingly, of the mega deals announced between 2012 and 2015, 27.8 percent of them were terminated or withdrawn.  By contrast, large deals (>$1B-$10B) announced during the same period failed at a 12.9 percent rate and mid-market deals ($100M -$1B) failed at a rate of less than 5 percent. 

Deal Volume Decreases in 2016, While Deal Count Rises

Acquirers of U.S targets announced 47 more acquisitions in 2016 than in the previous year, a 4.1 percent increase over 2015, according to Bloomberg Law data.

Recent MandA Trends 2016

While deal volume decreased 18 percent from 2015, a robust fourth quarter, including 314 acquisitions totaling more than $648 billion, made 2016 a strong year for M&A nonetheless.

In all, in 2016, acquirers announced 1,206 U.S. acquisitions valued at $100 million or more, totaling more than $2.08 trillion.

For more on the latest trends in M&A, Bloomberg Law subscribers can access the Quarterly M&A Market Update.