Global TMT transactions fall 46pc in first half, bereft of ‘megadeals’
Tencent’s US$8.6 billion acquisition of Supercell the biggest recorded in the period. 1,363 deals made, worth total of US$223.1 billion
Global mergers and acquisitions in the combined technology, media and telecommunications, or TMT, sector saw a sharp 46 per cent decline in value to US$223.1 billion in the first half of this year, dampened by political uncertainty in Europe and fear of increased US interest rates.
There were 1,363 such deals made in the first six months of the year, down from 1,580 transactions with a total value of US$382.3 billion in the same period last year, according to a report released on Monday by Mergermarket.
The research firm pointed out that no “megadeals” worth US$10 billion or more were recorded in the first half, compared to a record nine transactions of that magnitude a year earlier.
Most of the upcoming transactions in the technology segment are expected to remain small, while there may be fewer telecommunications-related deals.
“Many Technology companies are at the beginning of their innovation life cycle, and as a consequence less mature businesses are coming to market commanding smaller price tags,” Mergermarket said.
It was upbeat about “a wave of consolidation” in the media segment during the second half of this year, led by major players in both China and the United States said to be targeting media content companies.
Britain, which has become a global hub for financial technology investments, is predicted to face uncertainty after the country’s vote to exit the European Union.
“A period of political turmoil could potentially lead to a slump in activity for British tech mergers and acquisitions, particularly within London,” Mergermarket said.
It said Chinese internet giant Tencent Holdings’ acquisition of Finnish mobile game developer Supercell for US$8.6 billion last month was the biggest deal recorded in the combined TMT sector during the first half.
Ricky Lai, a research analyst at Guotai Junan International, said that acquisition would help Hong Kong-listed Tencent “develop a global entertainment business spanning different media formats, including movies”.
The second-biggest Chinese merger deal in the first half was cinema operator Wanda Cinema Line’s US$5.7 billion takeover of movie studio affiliate Wanda Media in May.