US tops cross-border M&A activity in technology sector in 2018: GlobalData

Mumbai: The US registered the highest outbound as well as inbound mergers and acquisitions (M&A) deal volume in the technology sector in 2018 revealed GlobalData.

M&A Outbound
All the top 10 positions in terms of the number of outbound M&A deals were occupied by developed nations with the US leading the way in terms of both deal volume and value in 2018.

The US was way ahead of the remaining countries in the top ten list, with 552 outbound M&A deals and $85.2 billion in disclosed investment value in 2018.

All the top ten countries witnessed an increase in outbound M&A deals volume in 2018 as compared to the 2014-2017 average. However, five of them witnessed decline in investment value in 2018 as compared to the 2014-2017 average.

While Switzerland registered the highest growth in deal volume in 2018 as compared to the 2014-2017 average, Sweden occupied the top position in terms of growth in investment value.

M&A Inbound
Similar to outbound M&A, all the top ten countries witnessed an increase in the number of inbound M&A deals in 2018 as compared to the 2014-2017 average. However, three of them witnessed decline in the disclosed investment value in 2018 as compared to the 2014-2017 average.

With 408 inbound M&A investments, the US occupied the top position in 2018, distantly followed by the UK with 266 investments. However, with a disclosed investment value of $56.7 billion, the UK occupied the top position in terms of value and outpaced the US by a great margin.

The US also lagged behind other countries in terms of value growth and was among the three nations that witnessed decline in the disclosed investment value in 2018 as compared to the 2014-2017 average.

“M&A in technology space is gradually expanding outside Silicon Valley with emerging countries such as China and India creating attractive acquisition targets,” said Aurojyoti Bose, Lead Analyst – GlobalData.

China occupied the top position in terms of volume growth while India registered the highest growth in the disclosed investment value in 2018 as compared to 2014-2017 average.

“Cross-border M&A strategy has moved beyond geographic expansion and technology access remains the key driver of M&A in the space,” added Bose.

Acquirers are betting big on technologies such as cloud computing, e-commerce, FinTech, artificial intelligence (AI) and cybersecurity.

Some of the notable cross-border M&A deals announced in these areas in 2018 included SAP’s acquisition of cloud computing company Qualtrics for $8 billion; Walmart’s acquisition of 77% stake in e-commerce company Flipkart for $16 billion; PayPal’s acquisition of mobile payments company iZettle for $2.2 billion; and BlackBerry’s acquisition of AI and cybersecurity company Cylance by for $1.4 billion.

“With acquirers looking more and more outside their borders to acquire technologies based on strategic priorities, cross-border deal-making across the tech sector is likely to remain buoyant. Nevertheless, trade disputes and increased scrutiny of deals still remain areas of concern,” concluded Bose.

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