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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.

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