Two major deals in May 2014 drove up overall M&A values for the month. The largest was AT&T's $65 billion acquisition of DirecTV to expand its telecommunications services. Additionally, Bayer purchased Merck's consumer care unit for $14 billion to become a global healthcare company. While deal numbers remain lower than 2013, the total value for the first two months of Q2 2014 was already above the full 2013 Q2 value due to larger deals. Food and beverage M&A also saw significant activity, including Hillshire Brands' planned but later abandoned purchase of Pinnacle Foods for $7 billion. However, two months into the quarter, global M&A activity overall appears flat compared to

1. A MERGERMARKET REPORT ON GLOBAL M&A ACTIVITY
MONTHLY M&A INSIDER
JUNE 2014

2. Monthly M&A Insider | June
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Global Overview: Karen Sibayan and Demis Memedoski
Latin America: Raquel Mozzer and Fabio Lopes
North America: Urna Chakraborty and Lana Vilner
Asia-Pacific: Brandon Taylor and Hiro Mak
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However, deal sizes trended upward again in May, continuing
a trend from April. The total value of transactions two months
into Q2 2014 already reached US$623bn, exceeding the total
value for the full quarter of Q2 2013 that saw US$555bn.
Megadeals from North America
Two deals from North America from the Telecommunications
and the Pharmaceutical, Medical & Biotech sectors boosted
deal values during the month.
May’s top deal is AT&T’s US$65bn purchase of DirecTV. The
provider of satellite-based television is AT&T’s latest acquisition
target after the telecommunications company attempted, but
failed, to buy T-Mobile USA in 2011. More recently, published
reports have also indicated that AT&T is still eyeing Vodafone
Plc. even after it told UK antitrust authorities in January that it no
longer wanted to buy the European telecommunications provider.
The purchase would allow AT&T to include DirecTV’s services to
its current product offerings and to tap existing customers for
additional revenue by offering new bundled services.
May also saw an addition to the recent list of jumbo
pharmaceutical transactions. These companies are attempting
to boost their product offerings while divesting less stellar
and ancillary business units. Although not as large as AT&T’s
acquisition of DirecTV, Bayer’s US$14bn purchase of Merck &
Co’s consumer care unit will create one of the largest global
healthcare-related consumer companies. Merck includes in its
roster popular products Coppertone and Claritin.
Food M&A leads consumer deals
The Consumer sector, specifically food-related transactions,
had a significant slice of the pie in May as over a third of the
top 20 deals were from this segment. The third largest deal
announced during the month was Hillshire Brands’ US$7bn
purchase of Pinnacle Foods. However, Hillshire has since
abandoned its plan to buy Pinnacle and has turned its attention
to Tyson Foods.
Although the top deals thus far have been from North America,
one of the consumer megadeals announced in May was from
Europe. The US$5bn merger between the coffee businesses
of Mondelez International and D.E Master Blenders 1753
has resulted in a new firm called Jacobs Douwe Egberts.
The lack of organic growth opportunities in the food industry
has compelled companies to resort to M&A to expand their
offerings. Combining forces is also a way for food companies
to combat recent shortages in food items such as pork and to
be more competitive in terms of pricing.
A month shy of H2 2014, M&A activity thus far has not shown
enough strength to signify that the market is on its way to
a rebound in dealmaking. But there are pockets of activity,
particularly in food M&A, that are driving up numbers and
giving the market some measure of hope that a revival might
still be on the horizon.
Two months into Q2 2014, global M&A appears flat over 2013 numbers. Over this time period, there
were 2,158 transactions versus 3,515 deals in the whole of Q2 2013.