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M&A Highlights from the First Half of 2019

    
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Mergers and acquisitions are some of the biggest events in business, with the potential to shake up entire industries. Companies engage in M&A deals for a variety of reasons: gaining access to new technologies and markets, getting a leg up over their competitors, expanding along their products’ supply chain, and more.

Now that we’re firmly into the second half of 2019, it’s a good time to take a look back on what the first half of the year held for M&A deals. In this article, we’ll discuss some of the biggest M&A events in the first half of 2019 and take a look at what’s coming in the remainder of the year.

1. Declining M&A activity

Global M&A deal volume reached $842 billion in Q2 2019, and while that might sound like a lot, it's actually down 27 percent from Q2 2018. M&A activity during the first quarter of 2019 hit $927 billion, but the number of deals was down by 40 percent year over year.

What’s more, the total number of deals in Q2 2019 was the lowest for a single quarter since the 2008 financial crisis. Much of the M&A value in the first half of 2019 was generated by only a few "mega-deals".

2. U.S. as M&A leader...

Thus far in 2019, activity has largely been driven by deals in the U.S., which remains the largest market for M&A. U.S. M&A activity in 2019 actually had its best first quarter since 2000, with a total of $490 billion in announced deals.

Some of the top U.S. M&A deals announced in the first half of 2019 were:

  • The $121 billion merger between Raytheon and the airspace division of United Technologies.

  • Biopharmaceutical company AbbVie’s acquisition of pharmaceutical company Allergan for $63 billion.

  • Biopharmaceutical company Bristol-Myers Squibb’s acquisition of biotech firm Celgene for $74 billion.

With these last two deals in mind, it’s no surprise that healthcare was the most active U.S. M&A sector in Q1 2019, for a total of $181 billion in activity.

3. ...and Europe falling behind

Meanwhile, M&A activity in Europe plunged by 67 percent year over year in Q1 2019, and by 54 percent year over year in Q2 2019. Several major planned deals fell through in this period, such as the mergers between Fiat Chrysler and Renault, and between Deutsche Bank and Commerzbank. The average M&A deal size in Europe dropped below $5 billion.

In the United Kingdom, M&A activity was down by 62 percent in Q1 2019, causing the country to lose its status as the world’s third-largest M&A market. Uncertainty over the post-Brexit landscape and the current volatility of the pound are two explanations for the decline.

What’s Next for M&A in 2019?

Despite the general decline in activity, the first half of 2019 has been an eventful one for M&A deals—and the year’s not over yet.

If M&A deals ramp up in the second half of the year, it should help fulfill projections from Deloitte in its “State of the Deal” M&A survey for 2019. In the survey, which was released late last year, three-quarters of executives said that they expected their companies to close more deals in 2019 than in 2018.

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