Sector Watch

The US M&A revival has been in some part driven by a series of game-changing megadeals in the technology, media and telecommunications (TMT) sector and the pharma, medical and biotech sector.

Deals in these two sectors accounted for six of the ten largest deals in H1 2014. In TMT, the largest deal of the period was Comcast’s proposed US$68.5 billion takeover of Time Warner Cable, while Canada- based Valeant’s pending US$44.4 billion acquisition of Allergan was the largest in the pharma, medical and biotech sector. TMT accounted for 34 percent of total deal value in H1 2014, and pharma, medical and biotech represented 22 percent of combined deal values.

Deal volumes, however, indicate that other sectors have also benefitted from the deal recovery. While TMT still topped the list, accounting for 21 percent of deal volume, industrials and chemicals (18 percent), business services (13 percent) and pharma, medical and biotech (10 percent) also accounted for a significant share of deal volumes in the first half of 2014.

HEADLINES

■ TMT most active sector in H1 2014, accounting for 34 percent of M&A activity by value ■ M&A driven by consolidation of broadband,TV and mobile services as well as growing demand for spectrum due to explosion in wireless use ■ Pharma, medical and biotech second most active sector, accounting for 22 percent of activity by value ■ Activity driven by replenishing of product pipelines and desire for R&D synergies and tax savings ■ Pharma, medical and biotech also at forefront of rising use of M&A for tax inversions