􀀗 M&A value more than halved in Q4, and
was down 47% for the year as a whole
􀀗 Cancelled deals hit a post-2000 high by
value; hostile deals matched 2003 peak
􀀗 Issuance update: IPOs vanish, debt
shows more resilience
This is the fourth issue of a quarterly analysis of trends in
M&A activity on a global, regional (including GEMs) and
sectoral basis. In this report we also include a special focus
on aggregate equity and debt issuance.
Amidst market turmoil, the value of global M&A activity
unsurprisingly reversed the tentative recovery seen in Q2
and Q3, and fell sharply. By value, the level of activity in Q4
was less than half Q3’s level, and three-fifths below its 5-
year average. All regions except Latin America and Asia
Pacific ex Japan demonstrated a marked fall in M&A value.
Although activity in the GEMs bloc was one-third lower
than its 5-year average, its share in global M&A rose
strongly, and almost matched the high seen in Q1 2008.
The value of cancelled deals rose sharply, partly reflecting
the lack of available finance. It may also have had something
to do with a sharp increase in the number of (opportunistic?)
hostile bids. The largest cancelled deal was BHP Billiton’s
USD66bn hostile bid for Rio Tinto.
With the global economy shrinking, the prospects for M&A
in early 2009 at least look equally thin. But for companies
with open lines of finance, predictable cashflow and/or cashrich
balance sheets – and strong nerves – this could also
prove a year of tremendous opportunity, not least in what’s
left of the financial sector itself.
Primary equity issuance all but evaporated in Q4. Secondary
issuance was stronger, but not happily so. Debt issuance
showed most resilience, despite many segments of the credit
market – and bank finance – being dysfunctional. Asia ex-
Japan, and GEMs, saw material increases on 2007. Of
course, “resilience” in charts and tables may not have felt
quite like that in the real world...