Merger and absorption transactions (M&A): results of 2015 in Russia and the world


The world market of merge and absorption transactions endures boom: in 2015 the sum of transactions exceeded 5 trillion dollars that was higher the record parameter of 2007 – 4,6 trillion dollars. This year became the record by the number of megatransactions, the sum of each exceeded 5 billion dollars – about 100 transactions have been recorded.

The greatest activity by the sum of transactions in the world was observed in health care branch: the total volume of transactions has made about 724 billion dollars that was explained by the growing demand for innovative drugs and treatment methods. So, merge of the American giant Pfizer, Inc and Irish Allergan Plc became the largest transaction in this branch and the second largest for the history of M&A. As a result of this transaction with the sum of 160 billion dollars completing the world's largest pharmaceutical company will be created in the second half of 2016.

A significant activity increase was observed in the technological sector: the volume of transactions with participation of the companies from this sphere exceeded 713 billion dollars. EMC data storage systems producer absorption by Dell corporation and direct investment fund of Silver Lake became the largest transaction for all the history of the IT market. The amount of transaction has made 67 billion dollars.

The leader among the countries by the number of merge and absorption transactions cumulative cost were the USA: about 50% of total transactions cost on the global market belonged to this country that was caused by traditionally high business activity of the American companies and high curremcy rate. In general the companies from the countries of North America (the USA and Canada), Europe (Great Britain, France, Switzerland) and Asia (China, Hong Kong, South Korea and Japan) had equal shares on the market.

As for Russia, it ranked 25th by this parameter in the rating. The total amount of transactions in 2015 with participation of the Russian companies did not changed compared to the previous year and made about 47 billion dollars. The greatest shares by transactions sum, unlike the world market tendencies , belonged to such sectors of economy as construction and development (28%), energy industry (19%) and mining (11%).

Unprecedented activity on the M&A market in the construction sphere (the sum of transactions increased 3 times compared to 2014), and also increase in the size of the average transaction in this sector from 65 million dollars to 96 million dollars demonstrates that investors consider commercial real estate as a way to secure the assets during the crisis and further increase their cost at the same time.

Two largest transactions provided about a quarter of merge and absorption market in Russia in 2015. The first of them – purchase of "Stroygazkonsalting" group of companies by Gazprombank and UCP the sum of which is estimated at 7 billion dollars, the second – acquisition of gold mining giant Polyus Gold by the Sacturino Ltd company for 5,3 billion dollars.

In 2015 the Russian merge and absorption market was local primarilly: 78% of all transactions (or 69% of their cost) belonged to internal transactions. As for cross-border operations, foreign investors transactions with the Russian assets was much higher, than transactions of Russian companies abroad – 67 compared to 34 respectively. It was the maximum gap in recent years, at the same time the cost of foreign companies transactions has for the first time exceeded the volume of the Russian transactions with foreign assets that was caused by the continuing devaluation of ruble.

As experts of the market mark, Russia is outside the investors interest because of sanctions. Considering difficulties with financial resources attraction for M&A transactions conclusion due to revenue and crediting reduction and also prospects of the Russian economy uncertainty, in the medium-term prospect merge and absorption transactions volume decrease in Russia is predicted. Growth of this market is expected not earlier than in 2017-2018.

On the contrary, in the world M&A transactions activity will continue to increase and will reach the peak in 2017 in the developed countries and in 2018 – in developing, at the same time the greatest growth rates should be expected in China, Hong Kong, the Netherlands, Mexico and India. The countries of Europe – Great Britain, Germany and Spain will become the most interesting countries for investments, and health care, information and telecommunication technologies will remain the most perspective branches.