A look back at deal making over the last 12 months, featuring the biggest successes – and failures – of the year
Global deal making rose by a fifth in 2010, supported by strong activity in emerging markets, according to initial figures from Thomson Reuters.
The data provider’s Preliminary Mergers & Acquisitions Review reveals that M&A activity worldwide in the year to December 14 is up 19 percent on 2009. The global figures received a big boost from emerging markets, which saw M&A activity hit an all-time high of $378.5 bn during 2010. What’s more, the proportion of global M&A deriving from emerging markets stood at 17 percent – another record.
The findings act as a warning to IR professionals in the emerging markets region. Defending a company against an acquirer is commonly considered an IRO’s toughest job, and Thomson Reuters’ figures suggest emerging markets will continue to see a lot of deal-making activity in 2011.
Of the developing markets, China has been the most active in M&A, accounting for 23 percent of emerging markets activity in the period covered by the review, followed by Mexico and Russia, which each supplied 10 percent.
Overall, the biggest M&A deal of the year was América Móvil’s consolidation of a number of telecommunications companies in the Americas, which cost $27.5 bn, including the purchase of Carso Global Telecom. This was followed by International Power’s $25 bn tie-up with GDF Suez Energy, and CenturyLink’s $22.2 bn merger with Qwest Communications.
Despite the growth of M&A activity in 2010, however, the year will most likely be remembered more for the deals that didn’t go ahead. There were several high-profile failures, giving the world’s top CEOs plenty to think about, and handing regulators and shareholders some significant victories.
Anglo-Australian mining giant BHP Billiton occupies the top spot in terms of the largest withdrawn deals, according to Thomson Reuters, for the failure of its iron ore joint venture with Rio Tinto. The planned tie-up between the two miners was scrapped in October after it became clear regulatory clearance would not be forthcoming.
BHP is second in the list, too, this time for its $40 bn failed bid for PotashCorp, which collapsed after the Canadian government stepped in to block the deal. And coming in third is UK insurer Prudential, which withdrew its $35 bn offer for Asian insurance firm AIA in June following pressure from shareholders, who felt the initial offer was too high.
