Merger and Acquisition trends in the CTM sectors 

25 February 2016

The momentum of mergers and acquisitions continued throughout 2015 as Communications, Technology and Media (CTM) companies looked for opportunities to consolidate, specialise further, diversify, and/or expand their international operations.

CTM deals involving a European entity have been announced with a combined value in excess of USD 275 billion* over a 12 month period; amongst these nine were valued in excess of USD 5 billion. Activity in the technology industry has been exceptionally strong; Q2 2015 saw the highest global value of disclosed deals for a single quarter since 2000.

To help our clients better understand these trends we have completed a proprietary analysis of some of the key M&A trends developing across the CTM industries; with a focus on activity involving a European buyer, seller and/or target. This technical bulletin examines some of the trends, challenges and risks associated with buying and selling companies. It also explores how CTM companies are dealing with these risks and potential obstacles.

M&A activity is buoyant across the CTM sectors. For example, M&A activity in the telecommunication’s sector has accelerated significantly and represents 70% of the top ten CTM deals*. This has been driven by increasing competition, pricing pressures, monetisation or sharing of infrastructure assets, service diversification, geographic strategies and further specialisation (e.g. into new service segments).

M&A in the media sector has also remained strong. Altice’s bid for Cablevison ranks in the top three deal announcements across the CTM sectors*. This example signals the continued consolidation of the CTM sectors through the rise of quad play (internet, landline, mobile, and TV) strategies, and continued diversification. Looking towards Asia and the media sector specifically, the Japanese publishing heavyweight Nikkei Inc. agreed to purchase the Financial Times from Pearson plc.

Finally, we have also experienced a major increase in semiconductor and technology manufacturing sector M&A, driven by several factors, including pricing and margin pressures, inorganic growth strategies, product development and innovation, increased specialisation (product and market segmentation), intellectual property acquisition, supply chain enhancement and a drive to expand international footprints.

*Please see full article for further notes, analysis scope and sources.