- Cross-border M&A made up 53% of all deal value in Q1 2016, up from 39% in 2015 and 43% in 2014
- Chinese and Canadian buyers pushed cross-border deal values to a new first-quarter record of US$324bn
- North American acquirers continued their buying spree in the EU, with 148 deals totaling US$47.1bn, representing 20% of all cross-border deals by volume and 21% by value
- Deals involving Latin American buyers and EU targets reached a record US$8.9bn, the result of a weak euro and attractive EU real estate prices
In the first quarter of 2016, cross-border M&A value rose to US$324bn, 14% higher than the first quarter of last year, while volume dropped 10% to 1,202 deals. Cross-border M&A made up 53% of all deal value, up from 39% in 2015 and 43% in 2014.
Chinese investors were particularly active this quarter as they continued to look beyond their own borders for growth opportunities. With deal values totaling a record US$83.2bn, Chinese buyers targeted assets in the chemicals, business services, and consumer sectors, a reflection of their need to acquire more advanced manufacturing techniques and technological know-how to build global brands.
Besides ChemChina’s US$45.8bn acquisition of Swiss agribusiness Syngenta — the largest cross-border deal of Q1 — Chinese buyers pursued a series of deals in North America’s real estate, business services, consumer and media industries totaling US$26.9bn.
Deal activity between North America and the EU also remained strong in Q1, particularly in the healthcare sector. Mylan, a US generic drug manufacturer, announced in February that it would acquire Swedish specialty pharmaceuticals company Meda for nearly US$10bn.
North American buyers pursued six of the ten biggest cross-border deals of the quarter, worth a total of US$66.7bn. Half of those transactions were Canadian buyers pursuing megadeals in the US, such as Waste Connections’ acquisition of Texas-based Progressive Waste Solutions for US$7.9bn.
In Latin America, two megadeals pursued by Inversora Carso, the investment vehicle of Mexican business magnate Carlos Slim, pushed the region’s acquisitions in the EU to US$8.9bn, record levels for a single quarter. Those deals included Inversora Carso’s US$7.4bn acquisition of Spanish construction firm Fomento de Construcciones y Contratas and its US$1.4bn purchase of Realia, a Spanish real estate firm.
Going forward, developed markets will continue to be an attractive target for acquirers from other regions, particularly as the European Central Bank continues its quantitative easing program, the US dollar remains strong, and China continues to pursue big deals to diversify its economy.