Value and Number of Cross-border M&A by Sector/Industry 2011-2013

According to Thomson Reuters Deals Intelligence the energy and power sector was the most active sector during 2013, commanding 15% of announced M&A, while the real estate and telecommunications sectors accounted for 14% and 11% of M&A activity, respectively. Telecom and real estate led all sectors by growth rate with 122% and 44% increases over 2012, respectively, while financials and materials registered declines of 40% and 32% compared to 2012.

Energy & power sector M&A deals reached US$340.5 billion in 2013, a decline of 26% compared to year-to-date 2012. Activity was concentrated in the US, with US$139.1 billion from US energy M&A, or 41% of year-to-date volume. This marks the slowest year-to-date period for M&A in the sector since 2009 (US$337.8 billion).

Deal making in the real estate sector accounted for 14% of global M&A so far this year with US$322.5 billion of deals announced, up 39% compared to full year 2012 and the strongest year-to-date for merger activity in the sector since 2007 (US$426.4 billion).

Financial sector acquisitions reached US$221.5 billion in 2013, down 42% from 2012. Activity was evenly balanced across regions with Europe accounting for 35%, and Asia Pacific and the Americas accounting for 27% and 23%, respectively. The continued threat of regulatory changes dulled M&A activity in 2013 and the finance sector saw the second highest decline compared to its peak year, down 60.3% compared to 2007 (US$ 582.8 billion). The only other decline larger than this was in leisure M&A which decreased 72.9% from its peak in 2006 (US$ 130.5 billion) to US$ 35.4 billion in 2013.

A culmination of macro, competitive and regulatory pressures spurred M&A activity in the Technology, Media and Telecommunications (TMT) sector, which saw large-cap M&A throughout 2013, with deals valued at US$ 510.1 billion, up 54.1% compared to 2012 (US$ 331.1 billion). As a result the share it had of global M&A increased to 23% from just 14.5% in 2012. Technology M&A during 2013 saw its highest value in six years at US$ 166.2 billion (2007 valued at US$ 164.8 billion), while media M&A deals valued US$ 92.1 billion, marking the third annual increase in value. Telecommunications M&A in 2013 reached the highest value in seven years (2006 valued at US$ 265.8 billion) with deals valued at US$ 245 billion.

The share of cross-border M&A deals in the sector targeting developing and transition economies increased from less than 4 per cent before 2006, to 10 per cent between 2010 and 2012, jumping to more than 18 per cent in 2013.

According to Unctad’s World Investment Report 2014 cross-border M&A deals in the pharmaceutical sector focussed on emerging markets, jumping to 18% in 2013. Unctad says the availability of vast reserves of overseas held retained earnings in the top pharmaceutical TNCs facilitates such deals, and signals further activity. During the first quarter of 2014, the transaction value of cross-border M&As ($23 billion in 55 deals) already surpassed the value recorded for all of 2013.