Top 10 M&A Deals of 2014
Revived markets, inversions, and big pharma’s appetite for new therapies spur megamergers.
2014 could be a year for the history books. Many believe that we will never see another year with so many mergers and acquisitions. [© Yuri Arcurs – Fotolia.com]
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Just a few numbers show how far the value of 2014’s top deals involving biopharma mergers and acquisitions (M&A) has surpassed those of 2013: The biggest acquisition of 2014, at $66 billion, is more than four times that of 2013’s number-one (Thermo Fisher Scientific’s purchase of Life Technologies for $13.6 billion plus $1.5 billion in debt).
The number of 2014 M&A deals exceeding $10 billion (five) is 2.5 times the two such deals that occurred in 2013, and the second deal barely surpassed eleven digits at $10.4 billion, the price Amgen paid for Onyx Therapeutics.
Most importantly, the value of 2014’s top 10 M&A transactions reached a combined $179.05 billion—nearly three times the combined $66.4 billion of a year earlier.
How did M&A deals get so huge? The revival of the financial markets, plus buyers’ willingness to pay big for new treatments, pushed M&A activity to new heights. So, too, did the trend of U.S. biotechs scrambling to slice their tax bills through “inversion” mergers with European partners—though the U.S. Treasury Department dampened that stampede somewhat through new regulations
The new anti-inversion rules claimed two other megadeals. One of them would have made this list had it not fallen through: AbbVie’s aborted nearly $52 billion purchase of Shire. The other deal was Salix Pharmaceuticals’ planned merger with Cosmo Pharmaceuticals, which at $2.7 billion would have missed the list by a wide margin, coming in as only the 18th largest M&A deal of 2014. (A third megadeal, Pfizer’s ill-fated $116 billion attempt to buy AstraZeneca, ran afoul of opposition from the takeover target as well as the U.K. government of Prime Minister David Cameron, which sought guarantees that the buyer would not eliminate jobs and operations in the kingdom).
So large are this past year’s mergers and acquisitions that the 11th largest deal narrowly missed this list despite its value of about $5.3 billion—Mylan’s purchase of Abbott Laboratories’ non-U.S. developed markets specialty and branded generic drug business. A deal that size would have ranked at No. 6 in 2013.
Finally, what about next year? Veteran industry observer G. Steven Burrill, CEO of Burrill LLC and Burrill Media, said December 16 that he doesn’t foresee 2015 being an even hotter year for mergers and acquisitions, or initial public offerings for that matter: “The unprecedented IPO and M&A activity this year will make 2014 one for the record books and unlikely to ever be surpassed.” Whether Burrill’s caution proves to be prudent remains to be seen.
Below is a list of 2014’s top 10 largest M&A deals disclosed in 2013 by drug developers, tools/tech companies, and CROs, ranked by deal value in U.S. dollars. Each acquired company is listed along with its acquirer or prospective acquirer, the price, and the status of the deal.