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Public M&A Trend Report 2018

The Market Tracker trend report provides in-depth analysis of the 42 firm and 49 possible offers announcements made for companies subject to the Takeover Code in 2018. It includes insight into public M&A trends and what we might expect to see in 2019 and beyond.

Topics covered include:

• transaction structure
• deal value and volume
• hostile takeover activity
• industry focus
• public-to-private transactions
• UK and foreign bidder activity
• post-offer undertakings
• disclosure of bidder’s 2019 intentions
• legal and regulatory developments

The report includes analysis of high profile transactions, including Melrose’s 2019 hostile offer for GKN and the competing bids for Sky by Fox and Comcast.

Key highlights:

Public M&A deal volume was slightly down in 2018 compared with 2017. However, this was offset by a substantial rise in deal value, with aggregate deal value of 122.1bn in 2018 (2017: 45bn) and average deal value of 2.9bn (2017: 959.5m). Of the 42 firm offers announced in 2018, 17 (40%) had a deal value of 1bn or more. The first three quarters of 2018 were particularly active, generating 36 deals with an aggregate deal volume of 117.5bn. The two largest deals were Takeda Pharmaceutical’s 2019 offer for Shire 45.6bn) and Comcast’s 2019 offer for Sky 30.6bn).

Computing & IT was the most active industry sector, but Financial Services, Pharmaceuticals & Biotechnology, Engineering & Manufacturing and Media & Telecommunications also saw high levels of activity. Schemes of arrangement remain the most popular choice of structure, accounting for 74% of all firm offers announced in 2018. 76% of all firm offers were cash offers and 93% included a cash element.

Private equity buyers were active, being involved in 29% of firm offers announced during the period, including four transactions with an offer price of 1bn or more.

Weak sterling appears to have contributed to continued interest from non-UK bidders, in particular from US buyers. Of the 42 firm offers announced in 2018, 74% were made by a non-UK bidder. US bidders took advantage of a strong dollar and were involved in 16 transactions, which represented 40% of all firm offers in 2018.

The report considers a number of legal and regulatory developments that took place in 2018, including the Panel’s 2019 enforcement of one of its rulings that Mr. David King should make a mandatory offer for Rangers football club, the government consultation to strengthen the UK’s 2019 national security merger rules and secondary legislation and Code amendments to address Brexit.

Market commentary:

The report contains expert commentary from:

• Simon Wood, Addleshaw Goddard
• Benjamin Lee, Bryan Cave Leighton Paisner
• Alison Smith, Freshfields Bruckhaus Deringer
• Selina Sagayam, Gibson Dunn
• Rob Hutchings and Adam Cain, Pinsent Masons
• Gillian Fairfield, Slaughter and May
• Jeremy Kutner, Sullivan & Cromwell
• Patrick Sarch, Tom Matthews, Allan Taylor, Philip Broke, Guy Potel and Dominic Ross, White & Case

 Click here to download the report.