What are M&A deals?
Mergers and Acquisition, the name is self-explanatory and hard to miss if you are an avid news follower or in any way connected to the world of finance. For those of us who are still in the dark and wondering what M&A is, let me clear this roadblock for you.
Mergers & Acquisition can be explained as the process in which two companies combine and consolidate to form one single entity, this can be facilitated either through merger meaning two companies combining their assets and liabilities and operating as one to harness synergy or through Acquisition, meaning one company taking over the operations of another company and acquiring them in the process.
There are various reasons why Mergers & Acquisition deals are facilitated, at the core of this idea lies the thought of probable synergy and elimination of competition and to gain larger market share with the combined customer base and reach of business entities and thereby fulfilling the ultimate objective of capitalists that is the maximization of profits.
The various ways in which Mergers & Acquisition deals can take place include purchasing assets and common shares of the other organizations, by the exchange of shares for assets, through the exchange of shares for shares. From an economic point of view, M&A deals can be classified as either vertical, horizontal, conglomerate.
The vertical deals are deals between companies at different production stages, horizontal deals imply two firms into the same industry coming together, the conglomerate deals implies firms from different industries joining hands for profit maximization. In this hyper globalized world the deals are not just limited to domestic companies but among companies operating in different nations.
Top M&A deals (2019) at a glance/ 2019 M&A deals retrospection
With the majority of M&A deals globally taking place in healthcare and finance industry, presenting the top M&A deals that made an impression in the first half of the year 2019.
Fidelity National Information Services and Worldplay
Fidelity National Information Services (FIS) bought US-based high-tech firm Worldplay in an acquisition deal that was valued at a massive 42.7 billion dollars, so many zeroes hanging in there! This M&A deal was the second-largest acquisition deal globally in the year 2019. The value factor was computed inclusive of the debt amount.
Ahli United Bank and Kuwait Finance House
Sparking the whispers of acquisition in the financial domain was the deal between Kuwait Finance House and Ahli United Bank. In mid-January, Kuwait Finance House acquired the Bahrain based Ahli United Bank in an acquisition deal valued at 7.7 billion dollars, net of the debt amount.
Ascendas-Sunbridge and CapitaLand
The buzz in the real estate sector was out loud when talks of a probable acquisition started doing rounds between real estate giants Ascends-Sunbridge & CapitaLand. In the second week of January, this was yet another big news for the M&A enthusiast. CapitaLand acquired Singapore based firm Ascendas-Sunbridge in an acquisition deal that was valued at 7.9 billion dollars, the valuation was computed net of the debt amount.
Ultimate Software and Hellman & Friedman
The technology space was also influenced by the M&A deals in the sphere. In the early days of February, the investor group led by Hellman & Friedman announced their acquisition deal, acquiring the United States-based high tech company named Ultimate Software. This acquisition deal was valued net of debt at a whopping 11.2 billion dollars!
Goldcorp and Newmont Mining
The materials sector was also impacted by merger and acquisition deals. The US-based company Newmont Mining announced the acquisition of Canada based target firm named Goldcorp. The acquisition deal took place in the second week of January for a substantial sum. The deal was valued net of debt at 13 billion dollars! Goldcorp really stood on its name.
GE’s Biopharma Business & Danaher
When it comes to the Merger and Acquisition deals the healthcare industry is sure to produce winners. A US-based firm Danaher acquired another US-based healthcare company GE’s Biopharma Business in an acquisition deal. The announcement started doing rounds in the last week of February. The deal was valued at an enormous 21.4 billion dollars, the acquisition value was computed net of debt.
SunTrust Banks and BB&T
The financial sector witnessed yet another huge Mergers and Acquisition deal in the first week of February. Both parties in the deal were US-based. BB&T acquired SunTrust Banks for a huge sum, the acquisition deal was valued net of debt at a whopping 28.3 billion dollars!
Celgene and Bristol-Myers Squibb
Yet another acquisition announcement in the healthcare sector came in the form of Celgene and Bristol-Myers Squibb. The deal was announced in the first week of January, again both parties based out of the United States. Bristol-Myers Squibb acquired Celgene for an astonishing record sum of value, the deal was valued at 93.4 billion dollars! Yes, you heard that right, hard to wrap our head around this!
First Data and Fiserv
Mergers and Acquisition deals in the Finance industry has been a norm for quite some time. The first half of the year 2019 witnessed another acquisition deals in the finance sector. The United State based Fiserv acquired the target firm First Data in an acquisition deal during mid-January. The deal was valued net of debt at 38.7 billion dollars, producing a win-win scenario for both parties in the deal.
Anadarko Petroleum and Chevron
The energy sector made an impression with its M&A deal in the first half of the year 2019. The second-largest US-based energy company Chevron agreed to acquire Anadarko Petroleum, one of the largest independent oil and Natural Gas Production companies. The deal was announced in the month of April and was valued at around 33 billion dollars, with Chevron acquiring all outstanding shares at 65 per share.
The first half of the year 2019 witnessed some significant Mergers and Acquisitions deals in various sectors, most prominent ones were related to the healthcare and the financial industry. When compared to the previous year’s value in terms of M&A deals there is a little shortfall but the still very significant sum was added to the segment.