<article>The global technology, media &amp; telecommunications (TMT) sector saw a substantial decline in the first quarter of 2016 (Q1 2016) compared to 2015’s record-breaking values, Mergermarket found through its data.</article>

The global technology, media &amp; telecommunications (TMT) sector saw a substantial decline in the first quarter of 2016 (Q1 2016) compared to 2015’s record-breaking values, Mergermarket found through its data.
The absence of megadeals and of consolidations within the telecom industry, as well as continued economic uncertainties prevailing in European markets, indicated that TMT merger and acquisition (M&amp;A) activity may not reach similarly record-high levels as in 2015.
“2016 has been expected by some to be a continuation of TMT’s golden age. First quarter M&amp;A values, however, have exposed a somewhat different scenario than what was originally predicted,” Mergermarket said in its report.
In 2015, there was an increased number of TMT megadeals, above $10 billion which was a significant factor behind high-valued M&amp;A activity.
<img loading="lazy" decoding="async" width="728" height="476" class="size-full wp-image-36883 aligncenter" src="http://www.dealstreetasia.com/wp-content/uploads/2016/04/TMT-Mergermarket.jpg" alt="TMT Mergermarket" srcset="https://media.dealstreetasia.com/uploads/2016/04/TMT-Mergermarket.jpg?w=728 728w, https://media.dealstreetasia.com/uploads/2016/04/TMT-Mergermarket.jpg?resize=768,502 768w" sizes="(max-width: 728px) 100vw, 728px" />
Globally, the sector recorded a total of 583 deals worth $85 billion, accounting for 14 per cent of the overall M&amp;A value in Q1 2016, down from 20 per cent in Q1 2015.
Compared to the previous year’s first quarter with 745 transactions worth $156 billion, TMT deals dropped by 45.5 per cent, making it the lowest valued Q1 since 2012.
Cross-border M&amp;A activity in Q1 2016 declined by 66.5 per cent to 210 deals valued at $23.2 billion compared to the previous year’s first quarter which had 285 deals worth $69.2 billion.
This dramatic drop could be attributed to an 88.7 per cent decrease in Europe’s cross-border inbound activity, the report read.
In terms of domestic activity, there was a less substantial decline of 28.8 per cent compared to Q1 2015 from $86.8 billion to $61.8 billion.
The US dominated the TMT sector in Q1 2016 with 209 deals valued at $37 billion, and accounted for 43 per cent of global TMT market share.
Europe showed signs of decline and became the least active region, decreasing its share in global TMT activity to 16 per cent, down from 38 per cent in Q1 2015. This is due to increased political tensions and economic uncertainties in Europe that may have negatively affected corporate investment decisions.
In Asia, despite concerns over probable economic stagnation in China, Asia-Pacific (excl. Japan) saw 134 deals worth $27.8 billion, increasing its total global TMT share to 33 per cent, up from 17 per cent in Q1 2015.
<figure id="attachment_36884" aria-describedby="caption-attachment-36884" style="width: 737px" class="wp-caption aligncenter"><a href="http://www.dealstreetasia.com/wp-content/uploads/2016/04/TMT-Mergermkt-region.jpg" rel="attachment wp-att-36884"><img loading="lazy" decoding="async" class="wp-image-36884 size-full" src="http://www.dealstreetasia.com/wp-content/uploads/2016/04/TMT-Mergermkt-region.jpg" alt="TMT Mergermkt region" width="737" height="495" srcset="https://media.dealstreetasia.com/uploads/2016/04/TMT-Mergermkt-region.jpg?w=737 737w, https://media.dealstreetasia.com/uploads/2016/04/TMT-Mergermkt-region.jpg?resize=768,515 768w" sizes="(max-width: 737px) 100vw, 737px" /></a><figcaption id="caption-attachment-36884" class="wp-caption-text">TMT M&amp;A deals over 10 years.</figcaption></figure>
Separately, in its consumer M&amp;A trend report, Mergermarket pointed out that deal activity in this sector was also facing a slowdown in tandem with overall global trend.
In Q1 the sector registered 449 deals valued at only $45.9 billion, versus 523 deals worth $137 billion in Q1 2015.
“The general downward trend in the sector, nonetheless, is a reflection of the overall global situation: the mega-deal frenzy, which drove M&amp;A in 2015, is no longer the defining trend in the market,” the intelligence platform added.
Whereas overall global M&amp;A was down 21.9 per cent by deal value compared to Q1 last year, consumer activity dropped by 66.5 per cent, the largest such decrease across all sectors aside from defense which fell 70 per cent.
“As a result, the consumer market share by deal value declined from 17.4 per cent at the beginning of 2015 to just 7.5 per cent this year, which made consumer the sixth most active sector globally, a stark change from its second place last year when it ranked only behind TMT,” Mergermarket noted.
<a href="http://www.dealstreetasia.com/wp-content/uploads/2016/04/Consumer-Mergermarket.jpg" rel="attachment wp-att-36886"><img loading="lazy" decoding="async" width="706" height="480" class="size-full wp-image-36886 aligncenter" src="http://www.dealstreetasia.com/wp-content/uploads/2016/04/Consumer-Mergermarket.jpg" alt="Consumer Mergermarket" srcset="https://media.dealstreetasia.com/uploads/2016/04/Consumer-Mergermarket.jpg?w=706 706w, https://media.dealstreetasia.com/uploads/2016/04/Consumer-Mergermarket.jpg?resize=768,522 768w" sizes="(max-width: 706px) 100vw, 706px" /></a>
The bulk of the global loss in consumer was attributable to strategic transactions, which comprised $41 billion in Q1 2016, a 69.1 per cent decrease from $132.6 billion worth of strategic deals in Q1 2015.
Private equity deals, on the other hand, saw an increase of 11.1 per cent compared to last year, and reached $4.8 billion in Q1 2016.
The acquisition of Fresh Market, a US-based operator of specialty grocery stores, by Apollo Global Management for $1.3 billion was the largest consumer private equity deal this year.
According to Mergermarket intelligence, in 2016 overall deal values in the consumer sector are expected to come in lower due to the impact of being compared to last year’s numerous mega-deals involving strategics.
Among such deals were the $54.5 billion Kraft Foods – Heinz merger and the $17.9 billion acquisition of Jarden by Newell Rubbermaid.
Given the conditions so far in 2016, the question remains whether companies that have made transformational deals in the past year will look to other larger buys while they are still in digestion mode.
<figure id="attachment_36885" aria-describedby="caption-attachment-36885" style="width: 733px" class="wp-caption aligncenter"><a href="http://www.dealstreetasia.com/wp-content/uploads/2016/04/Consumer-Mergermkt-region.jpg" rel="attachment wp-att-36885"><img loading="lazy" decoding="async" class="wp-image-36885 size-full" src="http://www.dealstreetasia.com/wp-content/uploads/2016/04/Consumer-Mergermkt-region.jpg" alt="Consumer Mergermkt region" width="733" height="478" srcset="https://media.dealstreetasia.com/uploads/2016/04/Consumer-Mergermkt-region.jpg?w=733 733w, https://media.dealstreetasia.com/uploads/2016/04/Consumer-Mergermkt-region.jpg?resize=768,500 768w" sizes="(max-width: 733px) 100vw, 733px" /></a><figcaption id="caption-attachment-36885" class="wp-caption-text">Consumer M&amp;A deals over 10 years.</figcaption></figure>
Also read:
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/china-telecom-media-tech-deals-climb-beating-downturn-pwc-36391/" target="_blank">China telecom, media, tech deals climb beating downturn: PwC</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/consumer-goods-sector-and-ma-growing-in-aseandeloitte-8789/" target="_blank">Consumer goods sector, M&amp;A growing in ASEAN: Deloitte</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/apac-outbound-ma-reaches-313-4-billion-in-2015bakermckenzie-27562/" target="_blank">Asia Pacific sees record 2354 cross-border M&amp;As in 2105; deal values exceed $500b: Baker &amp; McKenzie</a>

TMT and consumer deals fall in Q1 as megadeals dry up: Mergermarket

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