Companies continue to review their portfolios for opportunities to create value through acquisitions or divestitures.
M&A values and volumes witnessed meaningful increases in Q2 2018, with volumes in the quarter reminiscent of 2016 and 2017 levels. Reversing course from the prior quarter, the Pharmaceutical sub-sector led in deal volume with a 200% increase in Q2 2018 over the prior quarter, returning volume to average historical levels. The rise in activity was in line with expectations due to pent up demand and surplus cash.
Deal volume increased in Q2 2018, breaking a streak of steady declines experienced since 2016. The quarter also saw its second consecutive increase in deal value.
This quarter included an announced $81.7B acquisition of Shire plc. by Takeda Pharmaceutical, resulting in a deal value that more than doubled the Q1 2018 total. Novartis AG’s acquisition of AveXis, Inc. for $8.7B also helped drive deal value higher in Q2 2018.
While Q2 2018 included a megadeal that created a spike in deal value, the sector still experienced a notable increase in deal volume which may indicate a resurgence in the sector.
Even after excluding the Takeda-Shire deal, deal value for Q2 2018 was above the levels experienced in Q3 and Q4 2017.