Skip to main content

Technology, Media and Telecom M&A Trends 2015

The global networked economy has gained new momentum in 2015, with more strategic mergers and acquisitions (M&A) activity. According to the latest global market study by Mergermarket, the Technology, Media and Telecom (TMT) sector had a very active first half (H1) 2015.

Total deal value reaching $396.3 billion -- that's a 26.1 percent increase compared to H1 2014. As a result, the TMT sector reached both its highest deal value and share in global deal making (22.8 percent) for any H1 period on Mergermarket record (since 2001).

The announced domestic acquisition of Time Warner Cable by Charter Communications within the Technology sector influenced the overall value, constituting 19.6 percent of the sector's total sum.

The high price of this deal reflects a trend of increasing valuations throughout the whole M&A market this year, demonstrated by the average size of a TMT transaction reaching the highest on record in H1 2015 at $504 million per transaction -- exceeding the previous highest average of $383 million in H1 2006 by $125 million.

Furthermore, both cross-border and domestic deal values reached the highest H1 levels for TMT on Mergermarket record at $184.6 billion and $246.7 billion, respectively.

However, transatlantic activity reached only $30 billion in H1 -- that's a decline of 37.4 percent compared to $47.9 billion during the same period last year, indicating surges in domestic activity and increasing outbound deal flows to and from developing markets such as Asia.

The U.S. continues to drive activity within the sector, with total deal value reaching $238.4 billion -- that's a remarkable 46.2 percent increase compared to H1 2014, and the highest transaction value targeting the region on Mergermarket record.

What's driving this increased M&A momentum? Companies are faced with a growing pressure to provide their customers with packages that combine multiple needs, quickly, cheaply and on demand.

As a result, there has been a growing tendency for cross-investments between Technology and Telecommunications companies, which led to 30 deals worth $108.1 billion between both sectors in H1 2015.

According to the Mergermarket assessment, Technology ($114.6 billion) and Telecommunications ($119.3 billion) collectively made up 98.1 percent of the activity, with the media segment contributing only a fraction to the sector size.

Popular posts from this blog

Linux Phone Standards Forum

A new Linux Phone Standards Forum (LiPS) has been founded to promote mass market adoption of Linux telephony terminals through standardization, interoperability testing and market education. The founding members include Cellon, France Telecom, FTM Labs, Huawei, Jaluna, Mizi, Open Plug and PalmSource. LiPS will support device manufacturers and operators in bringing to market Linux-based devices at lower cost (due to lower deployment costs through standardization), while facilitating the programming and development process for software and silicon vendors. The Forum said plans to work with other organizations such as the OMTP and OMA to identify requirements of distinct device categories including smartphones, feature phones, fixed-line, or converged devices. For each of these categories, or profiles, LiPS will define standard API�s that support relevant applications and services as well as a certification process for technology providers. In keeping with the open source philosophy, L

Cloud Services Gain New Momentum in Europe

Across European nations, more CIOs and CTOs are investing in public cloud services that become the essential foundation for the design and delivery of innovative digital transformation projects. Public cloud computing spending in Europe will reach $113 billion in 2022 and will double to $239 billion by 2026, growing at a 22 percent 5-year CAGR, according to the latest market study by International Data Corporation (IDC). Investments in Software-as-a-Service (SaaS) will continue to lead most of the spending in Public Cloud in Europe in 2022, but Platform-as-a-Service (PaaS) will be the fastest-growing segment. In fact, PaaS enables digital business deployment via the quick testing and production of new software applications. Public Cloud Market Development Professional services, banking, and discrete manufacturing will be among the top spenders in public cloud services, absorbing almost 60 percent of the overall public cloud services spend in 2022.  Human-centric industries are adjustin

Strategic Digital Transformation Spending Trends

Looking ahead, many Chief Executive Officers (CEOs) continue to selectively invest in new strategic digital transformation projects that enable a significant competitive advantage. Some additional investments may go towards improving existing IT infrastructure and operations.  Worldwide IT spending is now projected to total $4.5 trillion in 2022 -- that's an increase of 3 percent from 2021, according to the latest updated estimate by Gartner. For now, most CIOs will be relieved that their budget is safe from major cuts. While IT spending is expected to grow in 2022, it will be at a slower pace than in 2021 -- partly due to a 5 percent cutback on spending for personal computers, media tablets, and printers. Digital Transformation Market Development "Central banks around the world are focusing on fighting inflation, with overall inflation rates expected to be reduced through the end of 2023. However, the current levels of volatility being seen in both inflation and currency exch