The savvy CEOs anticipate that trends in 2017 are likely to follow the path of disruptive events in 2016.
Change is the norm. Digital technology will continue to have a dramatic impact on legacy players in the marketplace.
Technology, Media and Telecommunication (TMT) sectors completed 3,021 deals worth $698.2 billion in 2016, representing a decrease of 4.5% in value and 5.7% in deal count compared to a record 2015, while deal count remained consistent, according to the latest market study by Mergermarket.
The TMT sector accounted for 21.4 percent of global mergers and acquisitions (M&A) activity – that’s up from 18.5% in 2015, and its second highest share on Mergermarket record (since 2001) after 2013 (22.4%).
TMT sector market development
Deal activity accelerated towards the end of 2016, with deals announced in the final quarter of the year (683 deals, $295 billion) marking the highest Q4 value on record.
U.S. M&A activity ramped up in the run up to November’s presidential election, with dealmakers looking to complete business before a winner was announced.
High profile mega-deals, such as AT&T’s $105 billion takeover of Time Warner, the largest transaction targeting any sector globally in 2016, and the $34.5 billion acquisition of Level 3 by CenturyLink, were both announced in the month prior to the election.
Such big-ticket deals consequently led to the U.S. being the most active region last year having recorded its second highest deal value on Mergermarket record with 1,101 deals worth $362.7 billion, accounting for 41 more deals compared to a record 2015 (1,060 deals, $393.8 billion), despite a 7.9 percent decrease in value.
According to the Mergermarket assessment, the outcome of the American 2016 election spurred the markets, with dealmakers hopeful that a more business-friendly climate will encourage more mergers and acquisitions in 2017.
Outlook for the global TMT market
Europe followed in terms of deal activity, with 992 deals worth $168.6 billion reaching the highest annual value since 2007 ($181.8 billion, 933 deals), while increasing its market share to 24% from 19 percent in 2015.
This increase was largely due to a rise in activity targeting Technology (708 deals, $121.3 billion) and Media (199 deals, $29.2 billion), up 72.6% and 107.7% by value year-on-year, respectively.
Virtual and augmented reality software apps will be the TMT sectors to watch in 2017. Moreover, sector dealmakers are expected to invest millions into start-ups that are promising to turn new technologies into commercial opportunities in 2017.