December 23, 2005
Global M&A Volume in 2005 Climbed by 38% to $2.9 Trillion
As noted in this article from yesterday’s WSJ, this was a good year for deal lawyers! Below is an excerpt from the piece:
Global merger-and-acquisition volume has increased 38% to $2.9 trillion in 2005 from a year earlier, with Procter & Gamble Co.’s $60.8 billion acquisition of Gillette the largest deal of the year.
Announced M&A volume in the U.S. and Europe reached $1.1 trillion, the highest levels for both regions since 2000, according to a preliminary year-end tally from data tracker Dealogic. Asian-Pacific M&A volume hit a record $474.3 billion, up 46% from $324.5 billion in 2004.
Initial public offerings of stock around the world climbed 23% to $169.6 billion, Dealogic said. Europe, Africa and the Middle East was the most active region, with $66.8 billion in IPOs. The Asian-Pacific region excluding Japan edged out the U.S. with a record $42.4 billion in deals, including the year’s largest IPO, a $9.2 billion sale of stock in China’s state-owned China Construction Bank. The U.S. was third, with $37 billion in new stock sales.
U.S. M&A volume rose 30% from $886.2 billion in 2004. Telecom was the most active industry this year with total M&A volume of $185 billion, followed by health care at $119 billion.
United Kingdom companies were the biggest acquirers of U.S. companies, buying $26.3 billion worth in 2005, while Canada was the largest recipient of U.S. overseas investment at $20.5 billion.
But the volume of U.S. IPOs shrank 16% from $44.0 billion in 2004. The number of deals also fell, to 216, from 231.
In Europe, announced M&A volume was 49% higher than the $729.5 billion in 2004. As in the U.S., telecommunications was the most active sector, led by Madrid-based Telefónica SA’s $31.7 billion bid for mobile operator O2 of the U.K.
Activity in Eastern Europe nearly doubled to a record $117.4 billion. Russia and Turkey were the most active markets.
Overall equity-capital markets activity, which includes stock sales of already listed companies and convertible bond issues as well as IPOs, hit $222.0 billion, the most since 2000, when it reached a record $258.1 billion.
In Asia, China was the most targeted country outside Japan, with a record $63.4 billion in announced deals. Australia ranked second, with $47.7 billion, but was down 34% from 2004. Indian M&A more than tripled to a record $18.4 billion from 2004. China also accounted for nearly half of the region’s IPOs, excluding Japan. Some $18.8 billion in stock was sold, 88% more than a year ago.
Goldman Sachs Group Inc. led investment banks in estimated M&A revenue in 2005 at $1.4 billion, followed by Morgan Stanley at $1.1 billion, J.P. Morgan Chase & Co. at $1.1 billion and Citigroup Inc. at $1 billion, Dealogic said.