Finance

Uncertain 2016 Didn’t Hamper Deals

1/09/2017 8:00 AM Eastern

Despite what it called “geopolitical uncertainty” in 2016, media deal values more than tripled for the year, according to research firm Mergermarket, with $133.2 billion in transactions for the period and fueled by the biggest potential merger in more than a decade.

 

The first half of the year was characterized by increased regulation under the Obama administration, while the second half of the year was dominated by the election of Republican Donald Trump, the firm observed.

 

With Trump saying during the campaign that he would block big media mergers, some deals came to the table perhaps a little earlier than expected, including the biggest deal of the year, AT&T’s $108.7 billion purchase of Time Warner Inc. The AT&T buyout — second only to AOL’s purchase of Time Warner Inc. in 2000 for $164 billion, largely considered the worst merger ever — was announced in October and at the time Trump said he would be against it.

 

Volatility notwithstanding, the overall M&A market thrived. According to Mergermarket, total deals in the U.S. were valued at $1.5 trillion, behind the $1.8 trillion of 2015 but the second highest level since 2001.

 

AT&T-Time Warner was the biggest deal of the year, globally, with second place going to German chemical company Bayer AG’s $63.4 billion purchase of Monsanto.

 

M&A: OK

Overall, M&A transactions in the U.S. were down in 2016, but still hit their second highest level since 2001, according to Mergermarket. Deal making in the media sector, dominated by AT&T’s pending purchase of Time Warner Inc., rose by 221%. ($ in billions)

 

Sector                        2015 Deal Value        2016 Deal Value           % Change Value

Energy/Mining/Utilities . . . $205.4 . . . . . . . . . . . . . $337.4 . . . . . . . . . . . . . .64.3%

Industrials/Chemicals . . . . .$238.2 . . . . . . . . . . . .  $206.6 . . . . . . . . . . . . . . -13.3%

Pharma/Medical/Biotech . .$298.4 . . . . . . . . . . . . . $176.7 . . . . . . . . . . . . . -40.8%

Technology . . . . . . . . . . . . . $229.9 . . . . . . . . . . . . . $176.7 . . . . . . . . . . . . . -23.1%

Media . . . . . . . . . . . . . . . . . . $41.5 . . . . . . . . . . . . . $133.2 . . . . . . . . . . . . 221%

Business Services . . . . . . . . $157.3 . . . . . . . . . . . . . $115.2 . . . . . . . . . . . . . 26.8%

Consumer . . . . . . . . . . . . . .  $181.8 . . . . . . . . . . . . . $86.3 . . . . . . . . . . . . . -52.5%

Other . . . . . . . . . . . . . . . . . . $545.0 . . . . . . . . . . . . . $231.9 . . . . . . . . . . . . . . 57.4%

Total . . . . . . . . . . . . . . . . . . . . $1,897.6 . . . . . . . . . . $1,464 . . . . . . . . . . . . . -22.8%

SOURCE : Mergermarket

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