Global mergers and acquisitions (M&A) activity in 2017 has exceeded $3tn for the fourth consecutive year.
In December alone, three big deals were struck, largely fuelled by a desire to respond to the growing power of technology giants including Amazon, Apple and Facebook.
CVS Health acquired the healthcare insurer Aetna for about $69bn, France’s Unibail-Rodamco bought Westfield shopping centre for $24.7bn and media mogul Rupert Murdoch sold the entertainment arm of his 21st Century Fox empire to Disney for $66bn.
Eileen Nugent, an M&A partner at Skadden, said that every industry is feeling the pressure to push back against large technology companies:
Every industry is being disrupted, everyone is trying to respond to technological changes, nobody wants to be left out and that’s why many companies are buying strategic assets to better position themselves to compete on a global scale.
Amazon has already hinted at plans to enter the pharmaceutical industry, and earlier this year the company made its first significant foray into the grocery sector when it acquired upmarket supermarket chain Wholefoods for $13.7bn.
M&A trends around the world
The US saw the most M&A activity in the world with $1.4tn generated from 12,400 deals, though their value dropped 16 percent from 2016.
In Europe, M&A activity rose by 16 percent to $856.3bn even though what would have been the largest deal in the continent — a $143bn takeover bid by Kraft Heinz to acquire Unilever — collapsed early in the year.
Jens Welter, co-head of European investment banking at Credit Suisse, said:
The pick-up in deal activity across sectors and geographies is fuelled by a European economy that is in its fifth year of recovery and growing at the fastest pace in a decade.
Meanwhile, M&A activity in Israel declined by 27 percent in value this year, according to a report by consulting firm PwC published on Monday.
Activity in the Asia-Pacific region hit $911.6bn, up 11 percent from a year ago, even though the volume of outbound dealmaking from China did not exceed the 2016 record.
While global deal levels exceeded $3tn this year, the total volume of dealmaking hit $3.5tn, a 1 percent fall from 2016 and the lowest figure since 2014, according to data from Thomson Reuters.
“Corporate and private equity executives foresee an acceleration of merger and acquisition (M&A) activity in 2018, both in the number of deals and the size of the transactions,” Deloitte said in its report on 2018 M&A trends.