2019 has indeed been a busy year in terms of M&A with many large deals and IPOs announced. A general trend observable throughout many of the industries can be one of consolidation: high costs and new tech-based entrants to the market is squeezing larger players, many of which have chosen M&A to acquire new technology, reduce costs and fend off the treats of competitors. Moreover, the low interest rate environment of this year and the uncertainty faced by many investors has shaped many of the corporate decisions of 2019. The following is a list of some of the more categorizing deals of the year within some of the larger and more relevant industries:


Novartis acquires The Medicines Company

Deal Value: $9.7bn |Deal Type: Acquisition | Date: 25-Nov-2019 | Nationality: US| Subsector: Pharma

If we look at the trends of the healthcare industry with respect to M&A and investments, we see that investments have increased for rare diseases and oncology. In 2018, $2bn were globally invested in rare diseases, up from $300m of nine years earlier. There are two main reasons for this: clinical trials are smaller with respect to those for common illnesses and the pricing is more robust. About two thirds of FDA’s approval for drugs in 2017 and 2018 where for oncology and rare diseases. With mass-market products the return on investment is relatively low because no system can afford for millions of people to be paying a lot for their drugs. In the meanwhile, more common diseases such as cardiovascular medicine and treatments for central nervous system disorders are becoming a less crowded field and could provide great opportunities. From an M&A perspective, global players are broadening their primary-care portfolio through acquisitions, the Novartis Acqusition of Medco for $9.7 bn being one such case. Small companies have become the engine of pharma R&D, and Novartis, since early 2018, has spent $28bn for five early stage drug makers.

In addition, data is becoming more important in the healthcare industry too. An example of this is the partnership that five National Health Service trust have signed with Google to process sensitive patient records in order to conduct artificial intelligence research and to develop an app to alert doctors and nurses when patients are at risk of acute kidney injury.

Roche acquires Spark Therapeutics

Deal Value: $4.3bn |Deal Type: Acquisition | Date: 25-Feb-2019 | Nationality: US, CH| Subsector: Pharma

The pharmaceutical sector has been busy with M&A activity ever since 2018, mainly being driven by loss in patents, the rise of gene therapy and new governmental policies putting downwards pressure on drug prices. Patent loss is a large and persistent issue for pharma companies, often putting a large dent in the bottom line, many companies thus find it lucrative to invest heavily in R&D and to target specific companies and sectors for acquisition in order to diversify their product offerings. Roche is a great example of both: the company dominated R&D spending in both 2017 and 2018 and participated in the acquisition of Spark Therapeutics to strengthen its slipping standing in the oncology sector. A noticeable trend in the pharma sector is a shift in focus to gene therapy. The rise in M&A activity in this space reflects a decrease in government spending mainly as a result of lower demand from public hospitals, by far the largest buyers of pharmaceuticals.

Technology, Media and Telecom

Alphabet, parent to Google, Acquires Fitbit

Deal Value: $2.1bn |Deal Type: Acquisition | Date: 09-Nov-2019 | Nationality: US| Subsector: Tech, Healthcare


The TMT sector is showing growing interest in tech companies for health data, a trend further characterized by Google’s acquisition of Fitbit for $2.1bn. The wearable market is expected to represent a $54bn opportunity and its close links to health have made both Apple and Google interested in it. But Apple and Google are not only interested in that. In these last months we have also witnessed a move of tech groups into banking: Apple Pay and Google Pay have started to process an increasing amount of payments, while also Facebook has introduced its own payment function; this has prompted PayPal to acquire Honey for $4bn, in a move to increase the monetization and penetration of its current customers. The wallet battle is intensifying and as a result, we have M&A activity: Stripe announced the acquisition of Touchtech Payments in April 2019. The competition among the players is fierce, with high pressure on lowering fees and low bargaining power.

CBS to reunite with Viacom

Deal Value: $12bn |Deal Type: Merger | Date: 15-Sep-2019 | Nationality: US| Subsector: Media


If we move instead to media companies, we will note that a streaming war is going on and the likely result will be a wave of consolidation where the successful streamers or tech groups will buy media groups and movie studios lacking the scale to compete. Disney, Apple, AT&T and Comcast are all launching new streaming services with the goal of being the third man standing with Amazon and Netflix. Of course this war is expensive: the price of the most popular content has jumped by a third with respect to one year ago and all the competitors are expecting higher cost on spending on programs: Netflix is set to spend $15bn on content this year, Disney and HBO Max has plans to spend $11bn in 2019 and Apple has committed more than $6bn to its streaming push. For these reasons the $12bn merge between CBS and Viacom seems only the beginning.

General Trend: Telecom towers and the telecom industry

A further trend in the telecom industry is one which involves the increasing sale of telecom towers. Examples are the Cellnex’s acquisition of Arquiva’s telecom towers for £2bn or Vodafone’s aimed spin-off of its tower division for as much as €20bn. Mobile operators are finding their cash flows under pressure and are being pressured to further invest in order to improve the speed and reach of fiber deployments; moreover these companies need cash also to resolve the balance sheet and shoulder the cost of 5G deployment. Lastly, many analysts feel that the market is undervaluing telecom companies’ assets and by spinning off the towers, there is a chance to realizes three times the valuation they had under network operators’ ownership.

Real Estate

Blackstone’s acquisition of Dream Global REIT

Deal Value: $4.7bn |Deal Type: Acquisition | Date: 16-Sep-2019 | Nationality: US, CN| Subsector: Real Estate, PE

Europe has seen a large influx of capital into real estate, a trend mainly driven by the low interest rate and uncertain environment of recent months. Blackstone, along with other private equity firms such as Brookfield, have recently shown more and more activity in this space, as is apparent with Blackstone’s acquisition of Dream Global REIT, one real estate deal of many for the American PE in recent years. Higher competition in the European industrial properties and office spaces have put the fundamentals of supply and demand at work, generating substantial returns to investors through rent income while the boom of e-commerce has led to a greater need for warehousing and distribution. As investors become ever more hungry for higher yield, real estate seems to be one of the sectors which capital is turning to. Moreover, both in Europe and Northern America, much of this activity can be attributed to the higher presence of private equity firms in the real estate space.

Prologis Acquires Liberty Trust

Deal Value: $12.6bn |Deal Type: Acquisition | Date: 9-Nov-2019 | Nationality: US| Subsector: Industrial Real Estate, Logistics

Prologis, the world leader in logistic real estate, acquired Liberty trust in November, expanding its holdings both in the US and the UK, effectively expanding its presence in a market where rent income has been on a rise and vacancies at record lows. These facts are effectively due to an increase in demand for scarce warehousing space and one of the main drivers of this demand in recent years has been e-commerce. Delivery speed has become a requirement for customers purchasing goods online, pushing demand for warehousing and distribution even further up. Effectively, as demand for such real estate goes up while the supply remains very much inelastic, many companies and private equity firms gain significant market power by holding such assets.

Ivanhoe Cambridge sells half of its stake in IDI Logistics to Oxford Properties Group

Deal Value: $3.5bn |Deal Type: Acquisition | Date: 30-Jan-2019 | Nationality: US, CN| Subsector: Logistics

This deal between two of Canada’s largest pension funds further emphasizes the effect of e-commerce on the industrial real estate market, especially in North America. Ivanhoe purchased IDI from Brookfield Asset Management for $3.5bn sold 50% of its holding to Oxford Properties Group for $1.7bn. This new partnership goes very far in underlining the trend of institutional capital shifting towards warehousing and distribution units over a backdrop of lower vacancy rates and higher rent.


AB InBev IPO’s Budweiser unit

Deal Value: $5.6bn |Deal Type: IPO| Date: 4-Oct-2019 | Nationality: BE, HKG| Subsector: Drinks, Brewing

The beverage industry is dominated by Belgian-Brazilian brewer AB InBev, the largest of all the brewers producing more beer than the next three competitors combined. AB InBev’s strategy for years has been to scale up and to acquire as much as possible in a bid to expand into fresh markets. The IPO of AB InBev’s APAC subsidiary comes at a time where the company needs to raise capital and reduce debt in order to keep the gears of its massive deal machine churning, yet it also underlines many of the fundamentals of the beers and beverage industry as a whole. This sector is experiencing shrinking growth in the established markets of Europe and North America and a search for growth has led many companies to Asia, specifically China, India and the South-East. Local producers in such countries lack the scale and distribution capabilities of a behemoth such as AB InBev, creating incentive for larger brewers to penetrate the market through acquisitions.

FCA and Peugeot Merger

Deal Value: $4.3bn |Deal Type: Merger | Date: 31-Oct-2019 | Nationality: IT, FR| Subsector: Automobiles

The automotive industry has been rocked by much change over recent years: stricter regulations, new electric and hybrid technology which is costly to acquire and dropping car sales coupled with inflexible overheads has pushed many auto makers to consolidate in order to turn profits or even survive. This trend can clearly been seen over the last few years where the FCA and Peugeot merger merely follows a string of other collaboration by car manufacturers, such as that of Volkswagen and Ford. Such collaborations, as with the FCA-Peugeot deal, allow car makers to lower their R&D costs through synergies, especially at a time where these costs are high due to a tighter emission regulations and R&D for hybrid and elective vehicles, and for manufacturers to access new markets where they may have had little presence before.

Natural Resources and Energy

Occidental acquires Anadarko

Deal Value: $57bn |Deal Type: Acquisition| Date: 29-May-2019 | Nationality: US| Subsector: Oil

The Permian Basin in the US has seen much deal activity over the last years, much of which has focused on the shale oil reserves located in the region. In fact, since the discovery of shale oil in the US, the country has become the largest oil producer globally. One of such deals is the acquisition of Anadarko by Occidental for fairly straight forward reasons: through this acquisition, Occidental gains access to many of Anadarko’s reserves, both onshore reserves in the US and abroad and also precious shale acreage in the Permian. Indeed, the Permian basin has been experiencing a trend of consolidation where larger oil players find it profitable to buy up the smaller competition. Smaller players have been struggling due to bottlenecks over the chain of production and transportation while labor costs have been on a rise. Through such acquisition, larger player leverage on their scale to generate synergies and to gain access to further reserves.

Carlyle Group purchases stake in Cepsa

Deal Value: $6.34bn |Deal Type: Acquisition| Date: 8-Apr-2019 | Nationality: US, ES| Subsector: Oil, PE

Oil prices have been on a recovery from past years of weak oil prices. This is over a backdrop of geopolitical tensions in oil producing regions and a push towards diversifying away from oil revenue in many oil-producing Arab countries. Indeed, both the UAE and Saudi Arabia have been involved in many deals to divest from their oil related assets. The targeted Saudi Aramco IPO is one such example and the purchase of a 40% stake in Cepsa from Mubadala, UAE’s sovereign wealth fund, is another. Such acquisition trends in the oil sector provide are usually equally beneficial: Oil-dependent Arab countries gain access to capital which they invest elsewhere in the economy whereas acquiring companies access valuable target with assets across the whole value chain of oil production and refinement. In Carlyle’s case, on such asset is Cepsa petrochemical business, a global leader in a growing industry.


The London Stock Exchange acquires financial information player Refinitiv

Deal Value: $27bn |Deal Type: Acquisition| Date: 01-Aug-2019 | Nationality: US, UK| Subsector: Financials

In the financial services industry, one of the most relevant trends is the disruption caused by fintech. Over this year we have seen some large IPOs (i.e. Nexi Group) as well as large acquisitions in the space. One particular sub-sector that stands out is the securities exchanges industry. Previously depending on acquisitions of other exchanges to increase transaction volumes, most exchanges have matured in size and have been unable to engage in further M&A with competitors due to antitrust concerns. That is why many of these exchanges are now finding another avenue of growth through acquiring financial data and analytics firms.

The biggest such deal this year was the London Stock Exchange’s $27bn acquisition of Refinitiv, a firm that provides market analytics, data, trading and risk assessment tools for customers. The deal was a continuation of LSE’s strategy of entering the high margin data services business, with the company previously acquiring FTSE international and Russell Investments. Investors expect significant synergies from the deal, as Refinitiv’s fixed income and FX trading platforms will be a great addition to LSE’s equity and derivatives platforms. In addition, as data drives now transactions, especially with more trading being automated or algorithmic, Refinitiv’s in house analytics and data aggregation software is extremely relevant to investors. The acquisition also has the potential of creating a one stop shop: an algorithmic hedge fund can use LSE data and analytics, trigger trades on LSE’s fx, equities, fixed income, or derivatives, platforms, have their trades cleared by LSE’s clearing house, and measure their returns against LSE’s indices.

German Boerse Purchases Axioma

Deal Value: $850m |Deal Type: Acquisition| Date: 09-Apr-2019 | Nationality: GE| Subsector: Financials

A less covered but similar transaction was the Deutsche Boerse’s $850m all cash acquisition for Axioma. Axioma, a provider of cloud-based risk and portfolio management software globally, is set to be combined with the German exchange’s index business and spun off into a new company valued at €2.6bn. The result will be an end-to-end platform that gives customers access to the #4 global index player along with the business intelligence and analytical infrastructure to develop their investment strategies. This is especially important now with the shift to passive investing and the growing demand for smart beta or customization of indices using technology.

Charles Schwab Acquires TD Ameritrade

Deal Value: $26bn |Deal Type: Acquisition| Date: 20-Nov-2019 | Nationality: US| Subsector: Financials

Another sub-sector where fintech has largely disrupted the market is the brokerage industry, with Charles Schwab recently announcing that it will acquire rival TD Ameritrade for $26bn. Due to the “Robinhood effect”, Charles Schwab recently slashed trading fees to 0, with competitors TD Ameritrade and ETrade following suit immediately after. TD Ameritrade, which earned 32% of its net revenue from trading commissions in the quarter ended June 30, 2019, has seen its shares decline by 30% since since reducing its commissions. Charles Schwab, on the other hand, only earned 6% of revenue from trading commissions, with 60% of revenue attributed to interest on client assets and 30% from the sale of asset management products. This presents an opportunity for Charles Schwab to pick up a rival on the cheap, create opportunities to cross-sell its asset management products to TD Ameritrade’s customers, and compensate for the decline in its revenue with the 20% of cost savings it expects to achieve on the combined company’s cost base.


Flutter Entertainment acquires The Stars Group

Deal Value: $10bn |Deal Type: Merger| Date: 08-Oct-2019 | Nationality: US, UK| Subsector: Financials

This year also marked a continuation of the consolidation occurring between online gambling companies. The biggest such deal this year was the all share acquisition of The Stars Group (TSG), a Canadian owner of online gambling platform PokerStars, by Flutter Entertainment, an Irish bookmaking holding company, creating the worlds’ biggest online betting operator. With regulators in the UK and Ireland imposing higher taxes, stricter advertising laws, more stringent gaming controls, and tougher anti-money laundering rules, companies like Flutter have been looking internationally (and to the U.S. specifically due to its lax regulation) to achieve growth. The merger would create a behemoth with large cross selling opportunities for products of both companies to customers of the other. Due to its size, the combined firm could also create a one-stop-shop for gaming, increasing both customer stickiness and customer lifetime value. The merger would also give Flutter greater access to international markets, with the 4 million customers in TSG’s international segment poised to allow Flutter to become the largest company by revenues in three new markets, Spain, Italy, and Germany, as well as continue to lead in UK, Ireland, Australia, and the US. TSG’s platform will also allow Flutter’s platform to be available with 30 languages, 25 currencies and more than 55 payment options, further aiding international penetration. The merged company is also expected to realize cost synergies of around £140m per annum due to shared infrastructure (R&D, Advertising…etc) and redundancies of corporate functions.

The Metro-Goldwyn-Mayer M&A Game

Within the gaming industry, a current trend is casino resorts selling their real estate assets to achieve an asset-light business model. MGM Resorts is aggressively pursuing this strategy and announced two major transactions this year. Firstly, MGM Resorts and Blackstone formed a joint venture to acquire MGM Resorts’ Bellagio for $4.25bn and lease it back to MGM Resorts for an annual rent of $245mm a year. MGM Resorts has a 5% stake in the joint venture and will receive cash of $4.2bn in the transaction. MGM Resorts also sold the Circus Circus Las Vegas to Treasure Island owner Phil Ruffin for $825mm. The cash is expected to help MGM fund some combination of paying down debt, returning cash to shareholders, and building a casino in Japan, which is expected to open up its gambling market in the near future. The asset light model is also consistent with MGM’s inroads into the online gaming market, a change from the capital intensive casino and resort business. Nonetheless, the sale of its real estate assets can deprive MGM Resorts of a sufficient buffer to absorb losses during a downturn. For example, during the last recession, MGM Resorts sold Treasure Island to stay solvent.



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