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Technology, Media and Telecom 2015 M&A Deal Update

The Technology, Media and Telecom (TMT) mergers and acquisitions (M&A) deals are off to a slow start this year, according to the latest worldwide market study by Mergermarket. Market activity so far in 2015 was not able to match the performance of 2014.

Case in point: the 612 M&A deals worth $144.3 billion in Q1 2015 were a 20.5 percent decrease by value and 61 fewer deals, when compared to the 673 deals valued at $181.5 billion in Q1 2014.

Although global M&A activity share for the TMT sector has fallen from the 28.6 percent share in Q1 2014 to a 19.2 percent share in Q1 2015, the consolidated sector has still been the strongest globally, closely followed by the Consumer industry with $143.2 billion.

Regional TMT M&A Market Trends

European TMT targets, with a total of M&A activity valued at $61 billion, experienced a 33.1 percent increase over the $45.8 billion in Q1 2014 -- representing the highest Q1 value on Mergermarket record, and constituting 42.3 percent of global TMT deal activity.

The U.S. market activity, closely following Europe with a 39 percent market share, has seen a dramatic decrease in TMT activity compared to Q1 2014. The American market saw a 51.4 percent fall from a record $115.8 billion in Q1 2014 -- that's now down to $56.3 billion in Q1 2015.

Asia-Pacific (excluding Japan) saw its healthiest Q1 since the financial crisis with deal values at $22.6 billion, led by China’s strong TMT deal activity valued at $16.5 billion, reaching the second highest quarter on Mergermarket record for the country.

Other TMT M&A Market Trends

Mergermarket reports that there was a clear contrast, year-over-year, between a dramatic decrease in domestic TMT activity and an increase in cross-border activity. Domestic takeovers fell by 53 percent to $57.2 billion in Q1 2015 while cross-border activity increased by 45.3 percent to $87.2 billion in Q1 2015.

All segments of the TMT M&A market saw a decrease, compared to Q1 2014. Although the Telecommunications segment was most active, it also witnessed the largest fall to $70.4 billion in Q1 2015 -- representing a 33.3 percent drop.

The Technology segment activity almost matched the values of Q1 2014 and together with the Telecommunications secgment constituted 92.6 percent of total market activity for the TMT sector.

By comparison, Media transactions valued at $10.8 billion, played a relatively small part in the consolidated TMT sector deal making share for Q1 2015.

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