Our thinking

Navigating change: US M&A H1 2018

What's inside

Clouds are forming on the horizon, however appetites for big-ticket deals have not yet diminished

US M&A defies market uncertainty

An impressive first half of the year for US dealmaking reflects M&A's enduring value in an uncertain market

After a very strong 2017—when M&A in the US reached its third-highest overall deal value since the financial crisis—deal value grew again in the first half of 2018. Compared to H1 2017, value rose 30.5 percent to US$794.8 billion when compared to the same period in 2017, while deal volumes held steady.

Activity has been brisk despite increasing macro-economic headwinds. The Federal Reserve recently raised interest rates and signaled its intention to do so again twice more before the year is out. Threats of a bourgeoning global trade war are intensifying after the imposition of tariffs by the US and other large economies. And the US stock market has experienced significantly higher volatility this year than it did last.

One could reasonably expect that M&A would cool against this backdrop, but the fact that it has not suggests that deals are going ahead for essential strategic reasons rather than opportunistic ones.

Technology and its disruptive impact across all sectors is one of the main factors that has made M&A a necessity. The impact has been most apparent in sectors such as retail and healthcare, where digital platforms are ideally placed to disrupt established service and distribution channels. No sector has been untouched, however. Unless non-tech companies have the resources in-house to write their own software and algorithms—and most do not—M&A may be the best option to keep pace with dynamic change.

We expect the second half of the year to be busy, but no one can afford to ignore the threats posed by rising interest rates, increasing protectionism, an incipient trade war that could increase tariffs, a potentially inverting yield curve, unsustainable pricing demands and a volatile stock market. Companies will need to navigate these dynamics if M&A's bull run is to continue.


John Reiss
Global Head of M&A
White & Case

Gregory Pryor
Head of Americas M&A
White & Case


Navigating change: H1 in review

First-half activity remains on par with 2016, as strong fundamentals continue to drive M&A

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PE hits new post-crisis high

Despite intensifying competition within the market, US private equity activity is yet to show signs of a downturn

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Sector watch

Energy, mining & utilities leads the field

Bulky oil & gas deals pushed energy, mining & utilities close to the top spot in H1, while digital disruption ensured a steady flow of tech deals

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Technology M&A gets white hot in 2018

Dealmakers across all industries are looking to secure US tech assets in order to keep up with the technological changes disrupting their industries

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Consumer firms adapt to survive

Despite a drop in headline figures, M&A within the US consumer sector remains an important method to secure long-term growth

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Oil & gas M&A gains cautious ground

A steadying oil price signals a brighter future for oil & gas M&A, yet market caution remains

oil pipelines

Big-ticket deals drive pharma M&A

Activity in the sector is fueled by the need to refill product pipelines and navigate convergence between health and tech firms


Industrials & chemicals M&A gathers pace

Corporate repositioning and tax reform are two key trends driving M&A in the sector


Is blockchain M&A poised to accelerate?

US dealmakers are learning to navigate the complex world of blockchain M&A, but they will have to proceed with care in heavily regulated sectors

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In focus: Financial services regulation

An overview of the financial regulatory landscape and key trends to watch

US dollar

Decision time for M&A in Delaware

Noteworthy rulings out of the Delaware Supreme Court and the Court of Chancery in the past six months are already having consequences for M&A activity

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Spotlight on public companies: Cybersecurity and governance

The number and severity of cybersecurity incidents at major companies has increased, causing regulators to take a tougher approach. We look at five practical steps companies can take to manage these risks

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Key trends to watch in the months ahead

Acquirers shrugged off macro-economic uncertainty in the first half of the year to secure deals of strategic necessity

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Meet our partners

Global M&A leaders

John Reiss


John Reiss
Partner, New York


Gregory Pryor


Gregory Pryor
Partner, New York


 Dr. Jörg Kraffel

Dr. Jörg Kraffel
Partner, Berlin


Christopher Kelly


Christopher Kelly
Partner, Hong Kong


Allan Taylor


Allan Taylor
Partner, London


 Barrye Wall


Barrye Wall
Partner, Singapore


John Cunningham

John Cunningham
Partner, London


Alexandre Ippolito

Alexandre Ippolito
Partner, Paris


Industrials & chemicals M&A gathers pace

Corporate repositioning and tax reform are two key trends driving M&A in the sector

2 min read

The US industrials & chemicals sector, which includes manufacturing as one of its subsectors, has been a rich source of deal flow over the last 18 months. M&A volume reached a record high in 2017, with a total of 949 deals announced. Activity has continued at this pace throughout the first half of the year, with US$73.6 billion worth of deals, an 80 percent increase in value compared to H1 2017.


Top industrials & chemicals deals
H1 2018

1: Wabtec Corporation agreed to buy GE Transportation from General Electric for US$11.1 billion

2: Tenneco agreed to buy Federal-Mogul for US$5.4 billion

3: WestRock Company agreed to buy KapStone Paper and Packaging Corporation for US$4.9 billion



Percentage increase in industrials & chemicals M&A value compared to H1 2017

Corporate maneuvering

Traditional corporate maneuvering has prompted a series of transactions, as large industrial groups refine their strategies, divest non-core entities and acquire targets that strengthen their core business lines. General Electric's chief executive, John Flannery, for example, has laid out his intentions to overhaul the conglomerate and scale down the business to the three core industry verticals of power, aviation and healthcare.

This has resulted in the sale this year of GE's transportation division, which makes train engines, to US rail equipment manufacturer Wabtec for US$11.1 billion; and the divestiture of the GE distributed power business to PE firm Advent International for US$3.3 billion.

Altra Industrial Motion, an electromechanical power transmission and motion control products manufacturer, meanwhile, acquired a portfolio of four companies from Fortive's automation platform for US$3 billion, in support of its strategy to widen its offering across the transmission supply chain.


US$73.6 billion

The value of 471 deals targeting the US industrials & chemicals sector in H1 2018

Tax breaks

The Trump tax reform package has proven beneficial for manufacturers too. In addition to the boost to profits from lower headline rates, the capex-heavy manufacturing industry has received a lift from reforms that allow for the immediate expensing of capital assets for up to five years, with reliefs tapering off after that period, as well as the facilitation of immediate depreciation deductions.

Prospects for M&A activity in manufacturing through the rest of the year are positive. Labor Department figures to the end of Q1 2018 show that the sector has added 232,000 jobs over the last year. Meanwhile, recent tax reforms have freed up cash for investment and the ongoing trend of technology convergence will continue to open up opportunity to build new revenue streams and service lines around core product lines.



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