Mergers and acquisitions have been non-stop this year, with lots of deals
done, and some doozies that were unable to cross the finish line. Here we look
at what's happened in the first half of the year; we will round out the entire
year's activity in another report early next year.
The top 10 deals in the first
half of 2014 totaled nearly $90 billion in value, with Actavis' $25 billion
deal for Forest topping the list. According to EvaluatePharma's
estimates, the deals worth about $50 billion surfaced in
just the second quarter, making it the biggest quarter since at least 2007 if
megamergers are factored out.
Much of that action was driven
by tax inversions, U.S. companies using a process to buy European companies to
lower their tax rates without having to move their offices. That was usually
not the only factor. Some companies diversified portfolios, or pipelines, but
avoiding taxes was the back story for much of the action, at least until the
U.S. Treasury Department took steps to curb it.
And it was the deal that
didn't get done that may have had the biggest influence on the government
finally clamping down. That was Pfizer's protracted and unsuccessful run at
AstraZeneca, which Pfizer saw as a way both to bring some much-needed firepower
to its pipeline and to lower its tax bill with a U.K. domicile.
It was a huge deal, with
Pfizer ratcheting up its offer to more than $115 billion--greater than the
total value of the 10 in this report--before the deal collapsed. Because of its
size and the vocal resistance from many sectors, it galvanized U.S. efforts to
find a way to stop U.S. businesses from using what many saw as tax dodge. Even
though it collapsed of its own accord, it led to new tax rules. That resulted
in killing another big deal later in the year, when AbbVie pulled the plug on
its $54 billion buyout of Ireland's Shire because of the tax change. Of course
it will never be known how many others, unannounced or just being discussed,
died after that. Despite that, it was a huge half-year. Read about the 10
biggest deals.