2014 Expected to be a Stronger Year for Mergers and Acquisitions in the United States -

In 2014, the United States is expected to see an increased level of mergers and acquisitions activity, especially in the middle market. The market for M&A activity is an important consideration for participants in acquisition financings because the relative volatility or stability of the market can impact the terms of the financing and dictate whether the terms are more favourable to lenders or borrowers.

Although M&A activity in 2013 did not live up to predictions, total dollar value of M&A deals was up, largely because of a few “mega deals”, including the $28 billion buyout of Heinz by Berkshire Hathaway, the $25 billion buyout of Dell, Verizon’s $130 billion agreement to buy Vodafone, and the $20 billion purchase by Japan’s Softbank of 70% of Sprint. The technology sector saw the largest volume of deals in 2013, which in the U.S. included Cisco’s $2.7 billion acquisition of Sourcefire and the acquisition of BMC Software for $6.9 billion by a private equity consortium. The momentum in technology M&A continued at the start of 2014 with the announcement of Lenovo’s purchase of IBM’s server business and Motorola Mobility from Google, for a combined $5.21 billion, as well as Google’s $3.2 billion purchase of Nest and VMWare’s $1.175 billion acquisition of AirWatch.

Originally published in The International Comparative Legal Guide to: Lending & Secured Finance 2014, 2nd Edition on May 7, 2014.