Technology, media and telecom M&A hit $698.2 billion in 2016
The savvy CEOs anticipate that trends in 2017 are likely to follow the path of disruptive events in 2016. Change is the norm. Digital technology will continue to have a dramatic impact on legacy players in the marketplace.
Technology, Media and Telecommunication (TMT) sectors completed 3,021 deals worth $698.2 billion in 2016, representing a decrease of 4.5% in value and 5.7% in deal count compared to a record 2015, while deal count remained consistent, according to the latest market study by Mergermarket.
The TMT sector accounted for 21.4 percent of global mergers and acquisitions (M&A) activity - that's up from 18.5% in 2015, and its second highest share on Mergermarket record (since 2001) after 2013 (22.4%).
TMT sector market development
Deal activity accelerated towards the end of 2016, with deals announced in the final quarter of the year (683 deals, $295 billion) marking the highest Q4 value on record.
U.S. M&A activity ramped up in the run up to November’s presidential election, with dealmakers looking to complete business before a winner was announced.
High profile mega-deals, such as AT&T’s $105 billion takeover of Time Warner, the largest transaction targeting any sector globally in 2016, and the $34.5 billion acquisition of Level 3 by CenturyLink, were both announced in the month prior to the election.
Such big-ticket deals consequently led to the U.S. being the most active region last year having recorded its second highest deal value on Mergermarket record with 1,101 deals worth $362.7 billion, accounting for 41 more deals compared to a record 2015 (1,060 deals, $393.8 billion), despite a 7.9 percent decrease in value.
According to the Mergermarket assessment, the outcome of the American 2016 election spurred the markets, with dealmakers hopeful that a more business-friendly climate will encourage more mergers and acquisitions in 2017.
Outlook for the global TMT market
Europe followed in terms of deal activity, with 992 deals worth $168.6 billion reaching the highest annual value since 2007 ($181.8 billion, 933 deals), while increasing its market share to 24% from 19 percent in 2015.
This increase was largely due to a rise in activity targeting Technology (708 deals, $121.3 billion) and Media (199 deals, $29.2 billion), up 72.6% and 107.7% by value year-on-year, respectively.
Virtual and augmented reality software apps will be the TMT sectors to watch in 2017. Moreover, sector dealmakers are expected to invest millions into start-ups that are promising to turn new technologies into commercial opportunities in 2017.