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With a strengthening economy and low borrowing costs, US buyers continued with strategic M&A activities for 2017. International uncertainty has given rise to increased focus on domestic strategies to drive value.
Domestic deal value increased from 44% of total deal volume in 2016 to 58% in 2017. However, this is being primarily driven by CVS Health and Aetna’s pending acquisition. Excluding this deal, domestic deal value share of total deal value remained flat year-over-year.
With rising multiples and dry powder, the availability of quality assets, and the willingness of owners to sell, will be a major factor in the direction of domestic activity in 2018.
Cross-border deal volume represented 32% of total deal volume in 2017, a decrease from 37% in 2016. Although global growth is stabilizing as emerging markets climb out of the commodity slump and developed markets are also looking stronger than a year ago, uncertainty about overseas investment remained as some US based companies have experienced challenges abroad and become more cautious, even exiting some markets. However, with the competition for assets, the demands for growth, the strength of the US Dollar and tax reform, 2018 may shape up to see a shift appetite.
Cross-border deal value in 2017 was driven by four megadeals, which accounts 82.7 billion US$, these deals represented 63% of the total cross-border value for 2017, whereas the three cross-border megadeals, accounts 22.5 billion US$, constituted only 27% of the total cross-border deal value for 2016.
Outbound deal activity constituted 42% of cross-border deal volume and 23% of deal value in 2017 (49% and 27% in 2016, respectively). Europe was the dominant region for US outbound activity in terms of both volume (55%) and value (68%). The largest outbound deal in 2017 was the KKR & Co / Unilever Spreads pending acquisition for $8.0 billion.
Inbound deal activity comprised 58% of cross-border deal volume and 77% of cross-border deal value (51% and 73% in 2016, respectively). Of cross-border deals, the inbound deal activity was led by European investors for both volume (33%) and value (84%). The largest inbound deal in the year was the BAT / Reynolds deal for $49.4 billion.
Historical versions of this dataset since 31 January 2016 are available.
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