Verizon Deal with Vodafone Lifts Global M&A Total
US telecom group Verizon’s recent US$124bn deal to take over Vodafone’s stake in their US wireless joint venture has boosted the value of global merger and acquisition (M&A) deals to date this year and dealmakers now anticipate their best year since 2008.
The value of announced M&A deals over the first nine months of 2013 has reached US$1.57 trillion, an increase of 4.6% on the figure of US $1.5 trillion recorded for the same period last year, according to Mergermarket. It was only early this month that the 2013 figure overtook that for 2012 and without the Verizon deal, the value of M&A so far this year would have been down almost 4% lower.
Verizon’s record breaking US$49bn bond issue to fund the deal with Vodafone also helped investment banks generate the most fees from debt sales since 2007. Total investment banking fees across M&A, debt and equity capital markets have reached US$52.5bn, a 3% increase over the same period in 2012, according to Thomson Reuters, boosted by particularly strong rise of 22% in fees from equity issuance.
According to the
Financial Times
, while European banks’ share of the fee pool fell to their lowest levels since records began in 2000, some bankers report a new positivity in the region, with M&A rising 3.6% to reach US$472bn of announced deals. The year should match 2012’s total but if it exceeds it, it would be the region’s best year for M&A since 2008, reports the
FT
.
The financial daily adds that some bankers describe a revival in telecom, media and technology (TMT) sector dealmaking as reminiscent of the late 1990s dotcom boom. It currently stands at a six-year high, with seven of the top 10 deals this year involving TMT companies.