The Biggest M&A Deals of 2016

Despite economic and political uncertainty across the globe in 2016, the year remained one of the most active for M&A deals. According to data collected by Dealogic, the value of the average deal in 2016 was $104.2m which, despite being slightly down on 2015’s average of $115.4m, was significantly greater than the average deals made between 2000 and 2014 at $77.1m. Here, we take a look at the biggest transactions that contributed to a successful year of deal making in 2016.

Sunoco Logistics and Energy Transfer Partners

In November Sunoco Logistics and Energy Transfer Partners, pipeline companies that are both controlled by Energy Transfer Equity, announced that they would be merging in order to cut borrowing and operating costs. The deal, which will see Sunoco purchase Energy Transfer Partners for $21bn plus $30bn in long-term debt, is expected to make annual savings of over $200m for the newly-combined entity by 2019.

Bayer and Monsanto

In the year’s second-largest deal, German pharmaceutical and chemicals company Bayer announced its intention to purchase US seed and agricultural chemical company Monsanto for £66bn. The deal would mean that together Bayer and Monsanto would control more than a quarter of the world’s supply of seeds and pesticides.

Qualcomm and NXP Semiconductors

In what was the biggest semiconductor deal of all time, San Diego-based Qualcomm announced its plans to purchase Dutch company NXP Semiconductors, the biggest supplier of chips in the automotive industry, in October. Valued at a staggering $47bn, the deal will enable Qualcomm to expand into new industries, thereby minimising its dependence on smartphones – a market that is slowing in growth.

British American Tobacco and Reynolds American

Also in October, British American Tobacco (BAT) bid $47bn for the remaining 52 per cent of Reynolds American that it does not already own. The deal would help BAT to gain a greater market share of the tobacco industry, however, the transaction has been far from plain sailing. In November, Reynolds reportedly rejected BAT’s bid and demanded a higher purchasing price. By the end of December, commentators speculated that BAT was preparing to increase its bid and it was reported that its offer would grow by $8 per share.

AT&T and Time Warner

And finally, in the largest and most-talked about deal of 2016, AT&T and Time Warner announced their plans to merge in October in a deal worth $85.4bn. The merger will result in an organisation with an incredibly large influence and dominance over information and entertainment. There has been concern that President-elect Trump could seek to block the deal following his previous criticisms of the transaction, however industry experts say that this is now unlikely and that we will see the deal progress as we move further into the New Year.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.