Benchmark International

Q1 2016 – M&A Deals Round-up

The M&A industry saw a record-breaking year in 2015, both in terms of size and volume of deals, with around 26,000 deals totalling £2.79 trillion completing across the globe. The top five sectors were Financial Services, Telecoms, Pharmaceuticals, Computer Manufacturing and Oil & Gas.

So, is 2016 set to continue in the same vein?

We take a look at the biggest deals of the year so far.

Shire buys Baxalta for £22 billion

After protracted negotiations, a deal for London-listed pharmaceutical company, Shire, to buy Illinois-based Baxalta, has finally been agreed. Shire specialises in drugs for treating hyperactivity and its acquisition of Baxalta, which develops treatments for cancers, rare blood conditions and disorders of the immune system, strengthens its position as one of the leading producers of next-generation medicines. The company issued a statement saying the deal would enhance its portfolio and presence in more than 100 countries, as well as driving growth to over £14 billion by 2020.

London Stock Exchange merger with Deutsche Börse worth £20 billion

In an effort to ward off a hostile bid from Intercontinental Exchange (ICE), the owners of the New York Stock Exchange (NYSE), the London Stock Exchange (LSE) and Deutsche Börse have agreed a three-year merger process worth £20 billion. It is estimated that the deal will cut costs by around £345 million every year, roughly 20 per cent of their operating costs, for three years and is described as a ‘merger of equals’. LSE will be purchased by the Frankfurt-based exchange and both Deutsche Börse and the LSE will be subsidiaries of a new company, UK TopCo, which will be listed in both Frankfurt and London and will combine share trading and derivatives dealing.

Nokia acquires Nakina Systems – Undisclosed Amount

In a bid to strengthen its network security portfolio, Finnish technology giant Nokia recently announced its acquisition of Canadian network integrity software specialist Nakina. The companies recently finished a five-year security software collaboration and the deal will help Nokia’s customers to protect critical security assets and avert security breaches. Nakina develops software used in identity access, configuration management and orchestration solutions by some of the world’s biggest service providers and will assist Nokia in preventing cyber security threats, particularly in the rise of the Internet of Things.

While the first quarter of 2016 has seen M&A activity already hitting the £70 billion mark, experts are predicting fewer giant mergers than last year and expect them to be replaced by a greater number of mid-size and cross border deals. M&A sectors to watch out for continue to include Manufacturing, Healthcare, Technology and Oil & Gas.

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