If there is one phrase that could define dealmaking so far in 2018, it is this: megadeals are back. Through the first two months of the year, there were already 25 M&A deals valued at US$4bn or more, setting a faster pace for such deals than in either of the last two years, according to Mergermarket data.
Toppan Vintage, a trusted financial printing and communications company, in partnership with Mergermarket, is pleased to present the newest edition of M&A Pulse newsletter. This newsletter features expert insights on high-dollar transactions, or "megadeals", in 2018.
Toppan Vintage question: What do you think will happen to the number of megadeals (value of US$4bn or more) globally over the coming 12 months? Leading deal experts weigh in...
Corporations flush with cash and financial buyers with dry powder are increasingly seeking highvalue targets for acquisition. In early 2018, several big-name companies have made bold bets, such as French pharmaceutical giant Sanofi’s US$11bn purchase of US-based hemophilia drug maker Bioverativ – one of three megadeals in the pharma and biotech space already this year.
In our survey, respondents broadly said that they expect more megadeals in the year ahead, with 12% saying they think the number will increase by more than 15 and 56% arguing there will be an increase of 5-15 transactions. Just 12% believe there will be a decline in the number.
To put the figures in perspective, there were a total of 129 deals globally worth US$4bn or more in 2017 and 133 in 2016, down from a peak of 158 in 2015. The total value of such deals last year was US$1.36 trillion.
A managing director at a boutique investment bank headquartered in the US said he expected the number of megadeals to rise later in 2018 after a tumultuous start to the year for equity and fixed income markets. “Companies will use a wait-andwatch approach for the initial half of the year,” the banker said. “Executives are still concerned about market conditions and will only push for megadeals in the latter half of the year. We see the number of such transactions not increasing more than 10 overall.”