Peak performance: US M&A in 2018

Technology M&A value soars in 2018

After a period of frenetic dealmaking in technology over the last few years, which saw businesses across all industries scramble to adjust to the rapid shifts driven by digitalization, 2018 has seen value climb in the tech M&A sector

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Tech M&A value increased 89 percent to US$217.2 billion in 2018, year-on-year. This was a result of an increase in large deals, as volume increased only 2 percent to 1,068 deals during the same period. There have been a number of deal highlights, including IBM’s US$32.6 billion acquisition of open-source software provider Red Hat and Saleforce’s US$5.9 billion purchase of data and integration platform provider MuleSoft.

Data and cloud services platforms are increasingly attractive as M&A targets. As the amount of data increases, so does demand for the computer power and storage needed to fully leverage that data, driving some of the larger deals in the tech sector in 2018.

Percentage increase in tech M&A value compared to 2017

The cross-sector convergence trend, meanwhile, which has sparked so many tech deals in recent years, also continued to drive deal flow. Amazon acquired an undisclosed stake in video doorbell maker Ring for US$853 million in a reported effort to boost its logistical capability, while its purchase of PillPack, an online prescription drug-delivery service, reflects its ongoing ambitions to grow its healthcare interests.


Tech under regulatory inspection

Although the deal fundamentals supporting tech transactions remain in place, the sector has been weighed down by growing regulatory concerns around the impact of inbound tech purchases on national security.

A proposed deal involving chipmaker Broadcom, based at the time in Singapore, and its US rival Qualcomm, which would have been the largest-ever tech deal, was blocked by the White House on national security grounds. As technology becomes increasingly embedded across all aspects of life and tech companies continue to gather data on billions of citizens, deals in the sector are likely to face increased regulatory scrutiny, particularly when foreign buyers are involved.

Top tech deals
FY 2018

1: IBM acquires Red Hat for US$32.6 billion

2: Broadcom acquires CA Technologies for US$18 billion

3: Microchip Technology acquires Microsemi for US$9.8 billion


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Peak performance: US M&A in 2018


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