Author: Valentina Pasquali
Project Coordinator: Alessandro Magno, Denise Bedell

The term Mergers and Acquisitions (M&A) refers to the buying, selling, dividing and combining of different companies and similar entities by corporations, with the goal of growing more rapidly and efficiently.

It is a trend spurred by increased global integration of the economy, which requires successful corporations to operate at a multinational level.

By Valentina Pasquali. Project Coordinators: Denise Bedell and Alessandro Magno

Data is from Thomson Reuters Mergers and Acquisitions Review 2012.

10 Largest M&A Deals 2012

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According to Thompson Reuters, the value of worldwide mergers and acquisitions activity grew 2% in 2012 over 2011, reaching a total volume of US$2.6 trillion. Such growth was driven mostly by spinoffs and divestitures, which came to about US$1.2 trillion last year, accounting for 47% of overall M&A activity and setting an all-time record (at least since 1980, when M&A activity first started being tracked).

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M&A between companies from emerging markets played an important role, totaling US$723 billion. This equaled a 9% jump from the previous year and 28% of overall M&A volume in 2012.

Cross Border M&A were also on the rise in 2012, with a total value of US$944.1, representing a 6% increase over 2011 and 36% of all M&A activity last year. The energy & power, industrials, and consumer staples sectors were chiefly responsible for the growth of Cross Border M&A, comprising 42% of their volume.

The energy & power se ctor also came first in terms of overall M&A activity in 2012, with 18% of the total, followed by the financials sector (13%) and the real estate sector (11%.) But it was consumer staples and retail deal making which saw the biggest gains, respective ly 71% and 38%. Materials and high technology instead declined by 22% and 18% over 2011.

Private equity M&A remained flat in 2012 compared to 2011, with an overall volume of US$321.4 billion, or 12% of total M&A activity.

B-04-2013 PieChart The largest transaction of 2012, by value, was the acquisition by various shareholders in the United States of a 100% stake of the American pharmaceutical giant Abbott Laboratories-Research (more than US$66 billion.) In the largest cross-border transaction, in the retail sector, the US’s WalGreens Co acquired a 55% stake in Switzerland’s Alliance Boots GmbH for US$21.4 billion.

In 2011, the largest transaction by value had been the acquisition by various preferred shareholders across the world of a 61% stake in American insu rance giant AIG (nearly US$60 billion.) In the largest cross-border transactio n, in the oil and gas sector, the UK’s BHP Billiton PLC had acquired the US’ Petrohawk Energy Corp for US$15.5 billion.

Data is from Thomson Reuters Mergers and Acquisitions Review 2012.

Largest M&A Deals

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Data from 2011

Data from 2012