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Global M&A market

In this video, learn about the recent history of the global mergers and acquisitions business and the prominence of M&A deals in the global economy.

In this video we consider the recent history of global M&A business leading up to the financial crisis and what followed. Jeff outlines the prominence of M&A deals in the global economy, what factors influence buyers selling their stock and what kinds of mergers are found.

Here is a snapshot of some facts and figures relevant to the US and global M&A markets that are presented in the video.

Types of merger

This image features four visual examples of merger types. Horizontal deals, denoted by a horizontal arrow, are when a buyer purchases a competitor, or same business in a different geography or related product line. A vertical merger, denoted by a vertical arrow, denotes a buyer purchasing a supplier or customer. A diversification merger is when a business buys another business different from its own operations. A private equity merger is when an investment fund buys an operating business, usually with the use of high debt. Often these funds will rely on existing or newly installed executives to run the business.

M&A facts

This image features four statistics regarding M&A facts. The first is a business themed silhouette image referencing the fact that 75% of global deals involve private firms with annual revenue under US0 million. The second demonstrates that most purchase prices are under US0 million. The third image is a small fraction of one-third, indicating that divestitures are one-third of transactions. The final image is a padlock which represents the statistic that 15% of merges and acquisitions are private equity, and mostly leveraged buyouts.

M&A volume in four global areas

This image is a pie chart which represents the M&A volume across global areas. These areas are the US and Canada, 45% of global M&A deals, Western Europe, 25%, Japan and Australia, 15% and emerging markets at 15%.

What investment banks are advisors?

Worldwide Asia-Pacific (exc. Japan) Japan
Global UBS Nomura
Morgan Stanley Macquarie Bank Mizuho
Goldman Citigroup GCA
Citigroup Morgan Stanley Citigroup (US)
JP Morgan Goldman Sachs Merrill Lynch (US)
Merrill Lynch   Daiwa
HSBC (No Korean / Japanese / Chinese)    

Leverage buyout volume decline after financial crisis

LBO dollar volume 1990 2005/8 Post crisis
US 4% 30% 15%
Europe 3% 31% 14%

The leverage buyout volume decline graph shows that pre-financial crisis, LBO volume in M&A deals was 30% and 31% for the U.S. and Europe respectively. Following the crash, this dropped to 15% and 14% respectively, denoted by the graph's trend lines.

On the bottom of each article and video step you will find a PDF available to download in the ‘downloads’ section. Each of these contain important information presented throughout the course and can be used as a revision guide.

Discussion

Studies prove that large acquisitions are not guaranteed to increase the stock price of the buyer. 50% fail to do that. Why do you think this is?

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Mergers and Acquisitions: Concepts and Theories

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