Following 2015’s results when the deal value of announced U.S. merger and acquisition transactions reached a record $2.055 trillion, 2016 saw a modest retreat as $1.719 trillion in M&A deals took place, according to data from S&P Global Market Intelligence. The recent results marked the fourth consecutive year that U.S. M&A deal value topped the $1 trillion mark. Additionally, last year’s deal total stands as the third-best ever, beat by 2015’s total of $2.055 trillion and 2000’s deal value of $1.722 trillion.
Healthcare ranked as the top sector for U.S. M&A in 2016 with $242.6 billion in transactions. The top deal for the healthcare sector last year was Dublin, Ireland-based Shire plc (LSE:SHP) entering into an agreement to acquire Baxalta Incorporated (NYSE:BXLT) from Baxter International Inc. (NYSE:BAX) and others for $36.2 billion on January 11, 2016. The consumer discretionary sector, aided by AT&T Inc.’s (NYSE:T) definitive agreement to acquire Time Warner Inc. (NYSE:TWX) for $109.4 billion on October 22, 2016, ended 2016 as the second-most active sector for U.S. M&A with $235 billion in announced deals. The energy sector was last year’s third-most active area for U.S. M&A deals with $230.1 billion in announced deals. The top deals for this sector in 2016 was Sunoco Logistics Partners L.P. (NYSE:SXL) entering into a definitive agreement to acquire Energy Transfer Partners, L.P. (NYSE:ETP) in a transaction valued, with the inclusion of assumed liabilities, at $59.9 billion on November 20, 2016.
Foreign acquirers in the U.S. were extremely active during 2016, as over $507 billion in U.S. M&A deals involved non-U.S. buyers. The top deal of 2016 in this area was Germany’s Bayer AG (DB:BAYN) made an unsolicited, non-binding proposal to acquire St. Louis, Missouri-based Monsanto Company (NYSE:MON) in a transaction valued at $65.7 billion in cash. That was followed by British American Tobacco p.l.c. (LSE:BATS) making a non-binding proposal to acquire theremaining 57.8% stake in Reynolds American Inc. (NYSE:RAI) in a transaction valued at $59.7 billion on October 20, 2016.
Real estate was the most active sector based on a number of M&A transaction last year - 5,657 deals to be exact. However, that was down from 2015’s results when 6,536 real estate M&A deals took place. Also fueling last year’s deal pace was an exceptionally strong year-end as fourth quarter 2016 deal value totaled $575.7 billion. That showing ranks as 2016’s best quarterly performance and the strongest since the first quarter of 2000 when $651.3 billion in transactions occurred.