M&A 2018 Annual Review

M&A activity through the first three quarters of 2018 appeared poised for a new record, before slowing in the final quarter as stock market volatility spiked and questions arose about the direction of economic growth. 1 Key Sectors Led the Way • Tech M&A continued to boom, reaching $574 billion in deal value globally – just short of 2015’s record of $577 billion – with private equity (PE) contributing a quarter of every dollar spent in tech M&A in 2018, according to 451 Research’s M&A KnowledgeBase. • Healthcare M&A shared center stage in 2018, with megadeals including Takeda’s $77 billion takeover of drugmaker Shire and health insurer Cigna’s $71 billion acquisition of Express Scripts. The action has continued into 2019 with Bristol-Myers agreeing to buy Celgene for $74 billion and Eli Lilly agreeing to buy Loxo Oncology for $8 billion. • Cross-border dealmaking remained strong, with the number of deals falling slightly from 2017 but remaining above the levels of other recent years. Dealmaking between the U.S. and China continued to decline, with inbound value falling to just under $3 billion in 2018 from $8.7 billion in 2017 (and a record $55.3 billion in 2016). Meanwhile, Chinese bids in Europe in 2018 rose 81.7%, to $60.4 billion. 2 Prospects for 2019 remain strong, with companies eager for growth and capital still abundant and relatively cheap, despite the Federal Reserve’s recent moves away from its low interest rate policy. However, there are risks that could slow M&A activity. 1 MORRISON & FOERSTER 2018 M&A ANNUAL REVIEW 2018 IN REVIEW Welcome to our 2018 M&A Annual Review. The M&A market in 2018 was strong, with one of the largest total deal values on record. We are proud to have worked with many of the most dynamic and market-shaping clients around the world. Our client work is highlighted on the following pages. Below is a summary of Morrison & Foerster’s recently released report, “Key M&A Trends for 2019,” in which our attorneys share their views for the 2019 M&A market, including commentary on tax reform, trade, private equity activity, and more. Read our full report: Key M&A Trends for 2019