With roughly 15,000 US deals, 2017 maintained the upward trajectory of mergers and acquisitions, posting an 11% increase in volume over the previous year. Middle market deals helped drive activity, with an increase in total value along with volume. A decline in megadeals – transactions with a value of more than $5 billion – contributed to a 16% decrease in overall deal value.
Conditions are in place for a strong 2018. The recent tax overhaul may provide incentives for some companies to consider M&A, as well as motivation for others to explore divestitures, which would boost the supply of acquisition targets in some sectors.
And company leaders are eager to consider deals. In the 21st PwC CEO Survey, 69% of US CEOs said they planned to pursue growth through new M&A, compared to only 42% of CEOs globally. That gap has widened in recent years, and the latest survey suggests US CEOs are adapting to an increasingly fracturing world, exploring how to avoid digital disruption and confident that capital is available for the right deals.
Of the megadeals that did happen in 2017, energy and power saw the most volume and value, followed by industrial products, health care, and media and telecommunications. Overall, though, huge transactions have largely given way to smaller, more frequent deals in many sectors, with technology and consumer goods posting the biggest volumes.
Technology also led all industries in both US inbound and outbound deal volumes, as cross-border activity increased 7% from the previous year. Other sectors continue to explore tech acquisitions as a way to stay competitive in an increasingly digital world.
Divestitures cut across the industry spectrum, with industrial products, consumer goods and real estate seeing the most activity, while the greatest value came in energy and media and telecommunications. The number of sales, spinoffs and other separations continues to climb as companies increase their focus on core operations and respond to activist shareholders.
John Potter, US Deals Sector Leader, offers more insight on the latest deals activity on the PwC Deals Blog. For details on individual sectors, please read the full industry reports below.