Navigating change: US M&A H1 2018

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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Cautious optimism returns to oil & gas sector

Energy, mining & utilities attracted a total of US$144.9 billion invested across 208 deals in H1. A recovering oil price has supported confidence in M&A as companies are now better placed to form longer-term dealmaking strategies. If favourable conditions continue, deal activity should continue to rise.

Despite the brighter outlook, however, much deal activity in the oil & gas sector is still driven by restructuring, and the industry remains cautious when betting too heavily on growth.


Tech deals cross-sector boundaries

Following a record annual volume in 2017, the TMT sector topped the deal volume chart in H1, with technology assets accounting for the majority of activity with 483 announced transactions. Salesforce's US$5.9 billion purchase of MuleSoft and Microsoft's US$7.5 billion planned acquisition of GitHub reflect an industry where M&A is being used to gain access to content, move existing services into the cloud and improve technical and operating efficiency.

The sector continues to attract interest from bidders operating in a range of sectors, from healthcare to industrials to consumer. As digitalization has entered all corners of the marketplace, it is now of paramount importance for companies to either build or buy tech capabilities to stay relevant, regardless of their industry.




A recovering oil price has supported confidence in oil & gas M&A as companies are now better placed to form longer-term dealmaking strategies.


Consumer firms respond to tech threat

M&A within the consumer sector continues to be an indispensable tool for business growth. A total of 196 consumer deals worth US$76.8 billion were announced in the first half of the year—the third-highest H1 value on record following 2017 (US$142.8 billion) and 2007 (US$99.6 billion).

Responding to online disruption was a major motivation behind deals, as retailers move to buy digital capability and additional avenues to reach consumers through acquisitions. Deals such as Walmart's US$16 billion planned acquisition of a 77 percent stake in India's leading online retailer Flipkart and Albertson's US$5.5 billion purchase of 2,500 Rite Aid stores exemplify these trends.


Pharma delivers bulky deals

M&A in the sector has been driven by the need for large pharma groups to refill their product pipelines as blockbuster drugs go off-patent and move into new treatment areas.

Despite an overall downturn in deal value, the sector delivered a number of multi-billion dollar transactions in the first half of 2018, including, in the US: Sanofi's US$11.1 billion acquisition of Bioverativ and KKR's US$9.4 billion planned acquisition of Envision Healthcare.


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Navigating change: US M&A H1 2018


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