Mergers & Acquisitions
U.S. Public M&A - 2018 Highlights
According to research compiled by Deal Point Data, the U.S. M&A market returned to growth in 2018. The dollar value of newly announced M&A transactions involving U.S. publicly traded target companies increased by 10.9% to $724.9 billion during 2018. The dollar value of M&A deals that closed during 2018 also increased by 16.3% to $734.8 billion compared to 2017. Goldman, Sachs topped the Deal Point Data league tables for both announced and completed deals for 2018. Morgan Stanley ranked second in both announced and completed deals and JPMorgan ranked third in both announced and closed deals. The average unaffected control premium paid by acquirers in 2018 was 28.28%, the lowest level since Deal Point Data began tracking M&A in 2008. This may signal a revaluation in control premiums given the increased volatility of the equity market during the year.
| Target | Acquirer | Equity Value ($bil) |
|---|---|---|
| Time Warner Inc. | AT& T Inc. | 83.6 |
| Aetna | CVS Health Corp. | 67.8 |
| Monsanto | Bayer AG | 55.9 |
| Express Scripts | Cigna Corp. | 54.2 |
| Energy Transfer Parters L.P. | Energy Transfer Equity L.P | 26.5 |
Corporate Governance
A review of Deal Point Data defense change and disclosure data for S&P 1500 companies in 2018 yields a few observations including governance best practices adopted by large cap companies continuing to trickle down to smaller companies, companies of all sizes are concerned with stockholder lawsuits, and absent traditional structural defenses, large cap companies are focusing on bylaw language, with very limited participation by stockholders. Read more
It’s hard to believe that the votes associated with what was once the most controversial item in the corporate governance landscape have become downright routine. Since January 1, 2017, 74 out of the 75 company proposals to approve a poison pill (aka a shareholder rights plan) passed and the lone proposal that was voted down comes with an asterisk because it was not a typical vote. Read more
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
Market Leaders - U.S. Public Mergers
Wachtell, Lipton, Rosen & Katz was the top ranked legal adviser on U.S. public M&A deals closed in 2018. Wachtell completed 21 public deals valued at $147.1 billion. Skadden, Arps, Slate, Meager & Flom ranked second in the high profile public M&A advisory market while Paul Weiss climbed into the top three.
| Rank | Firm | Equity Value ($bil) |
|---|---|---|
| 1 | Wachtell, Lipton, Rosen & Katz | 147.1 |
| 2 | Skadden | 109.6 |
| 3 | Paul, Weiss, Rifkind, Wharton & Garrison | 83.6 |
M&A Adviser Fee Watch
As of January 1, 2019, M&A advisory fees of $4.5 billion have been disclosed on U.S. public deals completed in 2018 an increase of 9.8% over 2017. Goldman, Sachs & Co. led the market with $755 million in fees disclosed. Morgan Stanley took second place among financial advisers in disclosed fees. JP Morgan rounded out the top three in disclosed fees.
Securites Offerings
High-Yield Bonds
The pace of issuance of SEC registered high-yield new issues fell by 35.2% in 2018. The dollar volume declined by 28.6.8% compared to 2017.
IPOs
The dollar volume raised in U.S. listed IPOs soared by 50.3% to $65.7 billion in 2018 according to data provided by Deal Point Data.