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Mergers & Acquisitions

2017 Year in Review - U.S. Public M&A

M&A activity involving U.S. publicly traded targets accelerated in the fourth quarter of 2017 reaching the second highest quarterly dollar volume of announced deals in the last decade. Fueled by hostile offers for QUALCOMM by Broadcom and Emerson Electric’s hostile offer for Rockwell Automation, announced deal volume surged during the quarter to $317 billion. On a full year basis, announced dollar volume declined by 28.9% to $621.9 billion, the fourth lowest level in the last five years. Goldman, Sachs topped the DealPointData league tables for both announced and completed deals for 2017. JPMorgan ranked second in announced deals with Morgan Stanley taking second place in closed deals for 2017. Evercore Partners ranked third in closed deals, their first finish ever in the top three. Wachtell Lipton ranked first in announced deals while Skadden and Latham & Watkins took second and third place respectively.

Top 5 Largest U.S. Public Deals Closed in 2017
Target Acquirer Equity Value ($bil)
Dupont The Dow Chemical Company 61.7
Reynolds American British American Tobacco 49.1
Spectra Energy Corp Enbridge Inc. 28.2
Level 3 Communications, Inc. CenturyLink, Inc. 26.1
St. Jude Medical, Inc. Abbott Laboratories 24.1

Market Leaders - U.S. Public Mergers

Skadden, Arps, Slate, Meager & Flom was the top ranked legal adviser on U.S. public M&A deals closed in 2017. Skadden completed 39 public deals valued at $205.3 billion. Wachtell, Lipton ranked second in the high profile public M&A advisory market.

Rank Firm Equity Value ($bil)
1 Skadden 205.3
2 Wachtell, Lipton, Rosen & Katz 200.6
3 Weil Gotshal & Manges 137.5

Corporate Governance

Peak Proxy Access Nomination Season

Governance activists waged a hard-fought battle to establish proxy access at public companies and ultimately succeeded as proxy access has been widely adopted. It is therefore rather surprising that we have yet to have a proxy access nomination go to an actual vote. If it is going to happen in the 2019 proxy season, we’re likely to know soon as we’ve entered the part of the calendar where proxy access notice windows are opening. Read more

M&A Adviser Fee Watch

M&A advisory fees of $4.1 billion have been disclosed on U.S. public deals completed in 2017 down by 5.23% over full year 2016. Goldman, Sachs & Co. led the market with $784 million in fees disclosed. JP Morgan took second place among financial advisers in disclosed fees. Bank of America Merrill Lynch rounded out the top three in disclosed fees.

High-Yield Bond News

New Issue Volume

The pace of issuance of SEC registered high-yield new issues increased by 1.2% in 2017. However, dollar volume declined by 11.8% compared to 2016.

High-Yield Bond Covenants

Once again, the level of covenant protection continued to decrease in 2017. We evaluated the covenants in SEC registered new issues and found that 62.2% contained no limitation on indebtedness restrictions up from 60.5% in 2016, 50% in 2013 and 31.2% for deals priced in 2010.