Bolstered by big deals in health care, luxury goods, and energy, 2017 is off to an exceptionally strong start for mergers and acquisitions. According to S&P Global Market Intelligence information, the announced deal value for worldwide M&A transactions occurring in January 2017 totaled $270.5 billion from almost 4,700 individual deals, a 30% increase from January 2016’s M&A deal value of $207.1 billion. This marks the best start to a new year for deal making since 2000 when $426.8 billion in M&A occurred, led by America Online Inc.’s $164 billion purchase of Time Warner, Inc.
The top M&A deal of early 2017 is pharmaceutical firm Johnson & Johnson’s (NYSE:JNJ) definitive transaction agreement to acquire Swiss biotech firm Actelion Ltd (SWX:ATLN) for $29 billion on January 26, 2017. The deal ranks as Johnson & Johnson’s largest-ever acquisition and the third-largest ever U.S. acquisition of a foreign company. That was followed by French lens maker Essilor International SA (ENXTPA:EI) entering into an agreement to acquire a 61.9% stake in Italian eyeglass designer Luxottica Group S.p.A. for $16 billion on January 15, 2017. Another big deal in the health care sector was Mars, Incorporated entering into an agreement to acquire VCA Inc. (NasdaqGS:WOOF) for $9.1 billion on January 7, 2017. The top energy sector M&A deal announced in January was DCP Midstream Operating, LP agreeing to acquire substantially all remaining assets of DCP Midstream LLC in a transaction, including assumed liabilities, valued at $8.86 billion.
Among specific sectors, healthcare ranked first in terms of deal proceeds during January 2017, with almost $58 billion in transactions, followed by real estate with $43.9 billion, and energy with $37.9 billion. The lagging sectors for worldwide M&A last month were telecommunication services with $544 million in deals, followed by materials with $8.36 billion. In terms of individual deal count, the real estate sector topped the list with 1,058 transactions, or about 23%, of the 4,699 occurring last month. That was followed by industrials with 657 deals, and consumer discretionary with 622 transactions.