Allen & Overy “Global Trends in Private M&A” report shows activity worldwide holding steadyby HVCA
Industrial, Tech/Media, Retail are favourite sectors
BUDAPEST – Allen & Overy’s latest “Global Trends in Private M&A” report, just released, shows M&A activity worldwide still vibrant during 2017, although slightly softer compared to 2016 levels. The report also highlights the success of private equity buyers in winning auctions for assets. Favourite sectors for deals were industrial and manufacturing, followed by telecoms, media and technology, and retail assets.
According to figures from Moody’s Analytics company Bureau van Dijk*, based on their Zephyr database, Western Europe saw overall M&A value in 2017 rise by 6%, from just over $1.21 trillion for 2016 to just over $1.28 trillion by year end. The global total for 2017 was just over $4.74 trillion, 3% behind 2016’s total of almost $4.9 trillion of worldwide activity. The CEE region and Russia saw a continuing downward trend, with just over $111.66 billion of M&A value in 2017, versus almost $137.4 billion in 2016 and almost $225.9 billion in 2013; although private equity investments into the region rose 42%, from just over $6.55 billion in 2016 to almost $9.3 billion in 2017. Hungary meanwhile, experienced an M&A value decline of some 78% during the year, with the overall value falling from some $9.5 billion in 2016 to just under $2.05 billion by end 2017, while January 2018 saw the trend continue, with just over $66 million of deal value in the month, versus almost $442 million in January 2017.
Allen & Overy’s figures show that 47% of M&A auctions in 2017 were won by a private equity buyer, demonstrating the vigour of the private equity market. Also, 34% of auctions involved an exit by a private equity firm, and 28% of them were actually a sale from one private equity firm to another, in secondary or tertiary buyouts. As for buyers in deals, private equity acquirers made up 29% of the global total, slightly down on 2016’s 36% despite their success in auctions, while corporates and strategic acquirers were the leading buyers, winning 59% of deals versus 2016’s 51%.
Although auctions represented only a third of all M&A deals in the CEE (similar to Asia, Australia and the Middle East), 83% of these processes remained highly competitive, which is the highest level globally. CEE maintained a high level of deals requiring antitrust/regulatory approval, with 64% of deals requiring antitrust/regulatory approval, the second most stringent region in the world behind North America’s 78%.
Allen & Overy was ranked first by deal value and second by deal volume in Europe in 2017 according to Bloomberg’s “Counsel to Principals” rankings.
Zoltán Lengyel, Partner at Allen & Overy’s Budapest office, observed: “We have seen a slack year for M&A investment into CEE during 2017, but the powerful fundamentals (strong corporate cash balances, availability of debt finance) are still in the global marketplace. We are optimistic that this part of the world will this year have a larger share of global M&A activity than it had in 2017. Allen & Overy as a firm has had very successful year worldwide in M&A, both in deal value and volume, and we look forward to this continuing in 2018.”
Notes for Editors:
- Allen & Overy is an international legal practice with approximately 5400 people, including some 554 partners, working in 44 offices worldwide.
- In this press release ‘Allen & Overy’ means Allen & Overy LLP and/or its affiliated undertakings.
- The term ‘partner’ is used to refer to a member of Allen & Overy LLP or an employee or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Allen & Overy LLP’s affiliated undertakings.
* Global M&A Review 2017 and Russia/CEE M&A Review January 2018, Bureau van Dijk Electronic Publishing, a Moody’s Analytics company