The past year settled any doubts that deal making is on the upswing. The M&A recovery gathered pace in 2014, equity capital markets forged ahead, and debt issuance chugged along. At $3.3 trillion, global M&A volume rose 26 percent year-over-year as of November 30, according to Dealogic. That surge was driven by a booming U.S. market, where activity jumped 41 percent, to $1.5 trillion. But Europe and Asia thrived too. In Europe announced M&A deal volume climbed 20 percent, to $876 billion, as big-ticket strategic deals picked up again.
“The deals we saw in 2014 were based on a strong industrial logic, and that is a sign of a healthy market,” says James Esposito, London-based global co-head of financing at Goldman Sachs Group. “In our view, we’re not near the peak of an M&A cycle.”
While U.S. bankers kept the upper hand in M&A, their European counterparts shone in equity and debt capital markets. Euro-denominated DCM issuance rose 1.5 percent through November 30, to $2.1 trillion, boosting global volume by 1 percent; U.S. issuance fell to $1.8 trillion, a 7.6 percent drop. Asia’s DCM contribution climbed 23 percent to hit a record $1.1 trillion.
In Europe supply from investment-grade and high-yield corporates reached a new peak as bankers cheered the resilience of the acquisition financing markets at a time when high-yield issuance had fallen in the U.S. “In recent years bond market volumes have been driven by refinancing, but in 2014 bond supply was bolstered by big-ticket M&A deals,” Goldman’s Esposito says.
|1||Texas energy conglomerate Kinder Morgan buys out master limited partnerships El Paso Pipeline Partners, Kinder Morgan Energy Partners and Kinder Morgan Management for $76.2 billion.||$30.53|
|2||Comcast Corp. agrees to acquire Time Warner Cable for $69.8 billion in a bid to grow its footprint as the No. 1 U.S. cable TV and broadband Internet provider.||1403|
|3||Drugmaker Actavis gets a Botox injection by agreeing to buy Allergan for $65.7 billion.||192|
|4||Minneapolis-based medical device maker Medtronic agrees to purchase Ireland's Covidien in a $46.8 billion tax inversion.||963|
|5||European cement producers Holcim and Lafarge strike a $40.6 billion merger of equals.||116|
|6||Chinese e-commerce giant Alibaba Group Holding raises a record $25 billion on the New York Stock Exchange.||3003|
|7||Social network Facebook pays $21.9 billion for mobile messaging provider WhatsApp.||104|
|8||French cable operator Altice assembles a high-yield bond offering worth €12 billion1 ($16.5 billion) to help subsidiary Numericable Group win a battle for mobile telecom SFR.||237|
|9||Eurobank Ergasias arranges a €2.9 billion rights issue to become the first Greek bank to return to private hands since the euro zone crisis broke.||117|
|10||The U.K.'s 3 billion-yuan2 ($488 million) bond offering makes it the first Western government to issue sovereign debt denominated in renminbi.||0.9|
|Deal values provided by Dealogic unless otherwise noted.|
Fee estimates provided by Freeman Consulting Services and Thomson Reuters.
1 Deal value provided by Altice.
2 Deal value provided by Her Majesty's Treasury.
3 Publicly disclosed.
At $239 billion, initial public offerings reached their highest-ever volume in 2014, rising 58 percent. Europe’s ECM bankers struck gold thanks to a 122 percent surge that pushed regional IPO volume to $68.3 billion, versus $58.4 billion for the U.S. — almost half of that from the listing of Chinese e-commerce giant Alibaba Group Holding — which gained just 7.8 percent. Global ECM activity climbed 13 percent, to $857 billion. With $260 billion of that sum, Europe saw a 27 percent boost, partly the result of its banks raising capital before the European Central Bank’s stress tests in November; Asia gained 37 percent to reach $234 billion.
When it came to investment banking fees, the U.S. stayed on top, generating $33 billion of the $72.9 billion total. But its share fell to 45 percent from 49 percent even as fees rose 3 percent globally. By contrast, Europe’s haul jumped 14 percent, to $18.4 billion, and the region’s portion edged up to 27 percent from 24 percent.
Institutional Investor’s 2014 Deals of the Year list recognizes some of the largest and most innovative transactions of the previous 12 months. Ranked by size, our ten deals include Comcast Corp.’s $69.8 billion takeover of Time Warner Cable (No. 2) and Swiss-based Holcim’s $40.6 billion merger with fellow cement producer Lafarge of France (No. 5). We also celebrate Alibaba’s $25 billion IPO (No. 6) — the biggest ever — and the U.K.’s renminbi sovereign bond, the first by a Western government (No. 10).
Top 10 Deals of 2014
- Kinder Morgan Goes All In
- Comcast Faces Screen Test
- Actavis Realizes Bigger Pharma Ambitions
- Medtronic, Covidien Home In on Tie Up
- Lafarge and Holcim Pour It On
- Alibaba Sets IPO Record with NYSE Debut
- Facebook's Data-Driven Takeover of WhatsApp
- Altice Turns Paper Profit
- Eurobank Ergasias Spearheads a Greek Banking Revival
- Bond Issue Boosts U.K.'s Renminbi Trading Cred