Introduction to Corporate Finance

21: Mergers, Acquisitions and Corporate Control

FIGURE 21.6 VALUE OF M&A DEALS BY REGION (2010 TO 2015) (USD MILLION)

5,000,000

6,000,000

7,000,000

Americas

Europe

Asia-Pacific

Africa/Middle East/Central Asia

1,000,000

2,000,000

3,000,000

4,000,000

0

Total deal value (USD Million)

Acquirer region

Americas Europe Asia-Pacific Africa/Middle

East/Central Asia

Target region

Americas (includes North and South America)

Europe

Asia-Pacific (excludes Central Asia)

Africa/Middle East/Central Asia

Note: 1 Data for 2015 is incomplete (figures provided are up to 19th December 2015).
Source: Data to create figure sourced from SDC Platinum, Thomson Reuters, 19 December 2015.

more acquisitions than companies in the other regions. The tallest bars indicate that most M&A activity

occurs within a region; that is, companies tend to acquire other companies in the same region. Aside

from acquirors within the same region, companies from the Americas tend to be the biggest acquirors

with the exception of the African / Middle Eastern region, where European companies dominate.

Albeit on a smaller scale, the amount of cross-border M&A activity has increased in recent years. For

example, there has been an increase in European acquisitions of US companies, and of US acquisitions

of Asian companies. Overall, the total value of cross-border transactions across all three regions increased

by 14.7% from US$2.86 trillion (1998 to 2003) to US$3.28 trillion (2004 to 2009).

Though not explicitly shown in Figures 21.4 and 21.5, about one-third of the ‘within Europe’

merger activity (the green bar in the back right corner) includes mergers that take place across country

borders (such as a French acquisition of a UK company). Analogously, about 15% of ‘within Asia’ merger

activity involved companies located in different countries.

As further proof of the growing importance of international M&A, Table 21.1 lists the top 20

corporate takeovers of all time. Two of the top five involve companies based outside of the United States.

TABLE 21.1 TWENTY LARGEST CORPORATE TAKEOVERS, RANKED BY TRANSACTION VALUE

Rank (by

Deal Size)

Year Deal Size

(USD million)

Target Name Target

Nation

Target Industry Acquirer

Name

Acquirer

Nation

Acquirer Industry

1 2000 202,785 Mannesmann AG Germany Wireless Vodafone

AirTouch PLC

United Kingdom Wireless

2 2001 181,569 Time Warner Inc United States Motion Pictures / Audio

Visual

America Online

Inc

United States Internet Software &

Services

3 2005 95,444 Shell Transport &

Trading Co PLC

United

Kingdom

Oil & Gas Royal Dutch

Petroleum Co

Netherlands Oil & Gas

4 2006 89,432 BellSouth Corp United States Telecommunications

Services

AT&T Inc United States Wireless

(continued)