M&A Activity Picks Up in May Despite Weaker Year than 2018
There were 720 M&A deals valued at a combined $194 billion in May, according to Pitchbook. For the year through the end of the May, there were 3,756 deals for $906 billion capital, roughly 1,140 fewer deals and $506 billion less value for the same period in 2018.
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Pitchbook data reveals that $9.5 billion was invested across 27 M&A deals in the U.S. last week, 6 fewer deals and $75 billion less capital after outsized M&A activity in the week prior. Two deals – targets Cray and Hulu - were in the billion-dollar range. The Walt-Disney Company acquired full control of Hulu for $5.8 billion, after what once was joint ownership by Disney, 21st Century Fox, Comcast, and Time-Warner.
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Data from Pitchbook shows that $84.5 billion was invested in 33 deals across American M&A markets last week, 10 more deals and $71.1 billion capital than the week prior. Four of those deals were for over $2.5 billion, including $38-billion and $23.3-billion-dollar deals, both of which were in the energy space. Another deal that caught significant media coverage was that of Boston Beer Co., the brewer of Samuel Adams brand beers, which paid $300 million to acquire Dogfish Head Brewery, a craft beer maker from Milton, Delaware. Dogfish produces over 250,000 barrels of beer annually.
Cannabis M&A Spiked Last Week with Four Deals in the U.S.
Pitchbook data shows M&A activity slowing last week, with $3.6 billion invested across 24 deals, $11.2 billion capital and seven deals fewer than the week prior. Japanese multinational conglomerate Hitachi shelled out $1.43 billion for Michigan-based industrial robotics integrator JR Automation in the week’s largest deal. Deal making in the cannabis space was hot last week, with four U.S. cannabis producers and distributors being acquired.
Waste Management Grows Eastern U.S. Operations by Acquiring Advanced Disposal
Data supplied by Pitchbook reveals that $14.8 billion in capital was deployed across 31 M&A transactions last week, four deals more and $28.8 billion less capital than the elevated levels of the week prior. The largest deal of the week was Waste Management’s $4.9 billion acquisition of Advanced Disposal, which will help expand the nation’s largest waste collector’s East Coast operations. Also, Canopy Growth announced a deal to acquire Acreage Holdings once cannabis is federally legalized in the U.S.
The U.S. job market added over 300,000 jobs while wages grew 3.2% for the last twelve months. The job market has been a shining spot in an economy facing rising rates, tariffs, and slowing global growth. New home sales grew dramatically month-to-month in November but are still slumped 7.7% from a year before. Lastly, the Institute for Supply Management showed that manufacturing growth is expanding at a faster rate in the first month of the new year, thanks to increased production and new orders.
Last week, the National Association of Realtors announced that U.S. existing home sells fell dramatically year-over-year in December and that home-price inflation is slowing down to a seven-year low. Also, the Equipment Leasing and Finance Association revealed that American companies are borrowing and leasing slightly less for capital investment purposes than one year ago. Lastly, worldwide credit levels continue to rise to great heights, equivalent to 318% of global output, as of September.
November’s final Consumer Sentiment reading fell more than expected to 97.5 points, continuing a slide off of March’s fourteen-year-high reading of 101.4. New housing starts grew last month amid rising tariff-related costs for builders, driven by new construction of multi-family housing units. Lastly, initial unemployment claims rose suddenly to a four-month high of 224,000, despite continuing claims falling to 1.67 million, a level not seen since the early 1970s.
A larger jump in retail sales proved to be one of very few optimistic highlights in last week’s economic news. The week entailed mostly negative news, as housing starts increased less than expected, the Philly Fed’s Manufacturing Index slipped significantly, and the University of Michigan Consumer Sentiment Index fell unexpectedly.
Last week, reports from the Commerce Department and the National Association of Home Builders indicated the housing market is beginning to cool off. Also, the Department of Commerce released their U.S. retail sales report for the month of June, showing a slight increase in retail activity. Finally, on Thursday, the Department of Labor announced that weekly jobless claims reached their lowest level since 1969.