Mergers and acquisitions activity was on the upswing in the first half of 2016, according to research firm Mergermarket, and is expected to heat up for the remainder of the year as content companies search for partners.
There were about 260 deals valued at $43.9 billion in the first half of 2016, up 91% from 308 deals worth $23 billion in the same period in 2015, according to Mergermarket.
“This wave of consolidation should persist further into 2016, according to Mergermarket intelligence, with major players both in China and the US said to be eyeing media content companies in order to enhance their offerings,” Mergermarket said in a statement.
Among the larger media deals in the first half was the joint venture between Liberty Global's Dutch cabler Ziggo Media and Vodafone, which Mergermarket valued at about $7 billion.
That growth was in sharp contrast to the telecom and technology sectors, which saw a drop in deal volume and value in the period.
According to Mergermarket, after a spate of high-value deals over the past several years, telecom sector M&A dipped 82.4% in the first half of 2016 to 78 deals worth $27.1 billion, compared to 100 deals for $154.1 billion in 2015. Tech deals also declined, dropping 25.9% to 1,025 deals for $152 billion in the first half of 2016 compared to 1,172 deals worth $205.2 billion in the prior year.
Mergermarket said the falloff in tech sector values could in part be attributed to smaller, less mature companies entering the deal pipeline, commanding smaller price tags.
The tech and telecom sector declines helped push overall deal values and volume down about 42% in the first half to 1,363 deals worth $223.1 billion, versus 1,580 deals worth $382.3 billion in the same period in 2015. It was, according to Mergermarket, the weakest first half deal volume and value since 2013.