Worldwide M&A activity was significantly down in the first quarter of 2009, despite a surge of activity in the US healthcare sector and a boom in Australian cross-border deals.
According to Thomson Reuters First Quarter M&A tables, global announced mergers and acquisitions totaled $US 472.7 billion ($646 billion) globally in the first quarter of 2009 - a decrease of about 29 per cent from the same time last year.
The US was unexpectedly buoyant thanks to significant consolidation in the healthcare sector. US-announced deals for the quarter totaled $US 211.8 billion - a 10.1 per cent increase on last year. The healthcare sector accounted for a massive 74 per cent share of this activity as a result of two mega deals - Pfizer's $US 64.5 billion agreement to acquire Wyeth (the second-largest US healthcare deal on record) and Merck's $US 45.9 billion agreement to acquire Schering-Plough. This represents the largest quarterly market share of any US sector on record.
Thanks to very strong cross-border activity, Australia also saw a 44.5 per cent increase in announced deals for the quarter. This was primarily the result of some large Australia/China deals in the resources sector, namely Chinalco's offer to acquire 15 per cent of Hamersley Iron (worth $US 5.2 billion and Rio Tinto Ltd ($US 4.5 billion) and China Minmetals Nonferrous takeover offer for OZ Minerals Ltd ($US 2.4 billion). Domestically, the proposed Hutchinson/Vodafone merger ($US 2.5 billion) also bolstered the figures.
However the Australian market was not enough to balance out a general decrease in activity across the Asia-Pacific region, and the area as a whole experienced a drop of about 34 per cent. Notably New Zealand saw a drop in activity of 85 per cent from the same time last year, China, a 35 per cent drop and Indonesia, a 64 per drop.
Europe also dragged down the worldwide average, with Eastern Europe seeing activity fall by 92 per cent, and Western Europe by 42 per cent. Similarly Japan saw announced deals decline by 38 per cent.
- By Zoe Lyon