Although Morgan Stanley led the league tables in announced deals by value, Goldman Sachs retained the top spot when measured by total fees, garnering US$40 million more than Morgan Stanley, according to Bloomberg Markets. Goldman’s total fees in 2009 were $1.74 billion, down from US$2.25 billion in 2008, and Morgan Stanley’s were US$1.7 billion, up from US$1.63 billion in 2008.
While 2009 was the slowest annual period for M&A since 2004, the trend showed improvement throughout the year. The fourth-quarter 2009 total of US$625 billion was the highest since the third quarter of 2008.
For full-year 2009, investments by governments and government entities accounted for 16.6% of overall M&A activity, the highest percentage on record. Private-equity-backed M&A totaled US$133.8 billion, a 43.5% decrease over 2008 and the slowest full-year period since 2002.
During full-year 2009, five industry sectors dominated M&A activity, accounting for a combined 69% of announced volume, according to Thomson Reuters. The Financials sector was most active, with a 20% market share, while the Energy & Power and Industrials sectors accounted for 16.9% and 11.8% of M&A activity, respectively. Healthcare, driven by pharmaceuticals and biotech, drove 10.7% of activity, while Materials contributed 10.1%.
Two of the largest transactions of the year were in the healthcare/pharmaceuticals sector: Pfizer's US$64.4 billion acquisition of Wyeth, and Merck's US$45.7 billion acquisition of Schering Plough. Other notable deals were ExxonMobil's US$40.6 billion acquisition of XTO Energy and Rio Tinto's US$58 billion joint venture with BHP Billiton.
According to a year-end 2009 survey of M&A professionals by the Association for Corporate Growth (ACG) and Thomson Reuters, dealmakers were guardedly optimistic about 2010. A report from Thomson Reuters and J.P. Morgan says that “business conditions for companies to consider undertaking M&A are improving,” and that fundamental to any pickup in M&A activity is economic growth. Some analysts warn that a double-dip recession is a potential wild card that could have a detrimental affect on M&A, but suggest that the underlying fundamentals will outweigh the short-term stress. In a year-end survey by Bloomberg of bankers, lawyers and investors, 60% said they expected only a “small increase” in M&A activity in 2010.
In the first quarter of 2010, worldwide M&A increased by 20.5% from first-quarter 2009 levels and was the strongest opening quarter for M&A since 2008. Emerging markets M&A recorded a 107.2% increase compared to the first quarter of 2009 and the highest volume since the second quarter of 2008. M&A activity with Asian involvement was up 197% over US$46.8 billion in the same period in a year earlier. However, European M&A recorded its third consecutive year of decline in first-quarter activity since the peak reached during the first quarter of 2007 and was the lowest since the first quarter of 2003. However, that was partly due to the decline in government-led transactions as part of bailouts of financial institutions.  Sources |
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