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M&A monitor

State of the market Q1 2018

M&A monitor

State of the market Q1 2018

With global deal values topping $1tn in the first quarter, it’s fair to say that 2018 has started with a bang. TMT deals outstrip those in other industries by some margin, although the two biggest transactions – Cigna/Express Scripts ($68.5bn) and Abertis-Atlantia/Hochtief ($41.5bn) – lie elsewhere.

How foreign is foreign?

Had Broadcom launched its $142bn bid for US chipmaker Qualcomm after redomiciling from Singapore, neither the Committee on Foreign Investment in the United States (CFIUS) nor President Trump would have technically been able to block the deal. Apart from its certificate of incorporation, Broadcom was by most other measures a US company – from the nationality of its CEO to the identity of its shareholders. So what does the case mean for the future? 

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China targets Europe – but will it last?

Chart showing Chinas investment into Europe, the US and Belt and Road

In 2016, Chinese acquirers spent a record $73bn in the US. Last year that fell by almost 90 per cent. Some of the drop can be explained by China’s crackdown on ‘speculative’ outbound investment. Some is down to acquisitive companies overstretching themselves. And some is clearly the result of US hostility – particularly given Beijing’s desire to see more deals for strategic technology assets of the kind the US is keen to protect. With US opportunities falling off a cliff – and a strengthening European economy – more Chinese money is flowing into Europe than ever before. So can we expect this to continue? 

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Corporates join the spin-off carousel

Spin-offs (or demergers if you’re European) – where a public company separates one of its business units or subsidiaries into a new listed entity and distributes the stock to its existing shareholders – are an early M&A trend for 2018. 

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Greetings from the Big Easy

Read the full report for a few key takeaways from the two days in NOLA.

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