The 10 Biggest U.S. M&A Deals in 2015

NEW YORK (TheStreet) -- As mid-year approaches, mergers and acquisition activity in 2015 continues at a hefty pace and is on track to eclipse 2014, a record year.

So far, there have been 4,536 U.S. deals announced (as of June 11), with a total value of roughly $863 billion, according to Dealogic. Deal value for the year is on pace to surpass 2014's $1.54 trillion in M&A deals.

What's equally interesting about 2015 is the number of deals valued at $10 billion or more. This year there have been 19 U.S. deals of that size -- the most on record year-to-date, Dealogic said. The health care sector has been the most targeted sector so far this year. Semiconductor consolidation has also significantly contributed to large deals this year.

The market for takeovers is going through "a boom that I think is going to continue through next year because the circumstances are so fertile," TheStreet's Jim Cramer told participants at December's The Deal Economy: Predictions & Perspectives for 2015. At the time Cramer identified 19 companies he thought could be bought or broken up in 2015. (None have been snapped up yet.)

How can ordinary investors benefit? Given that most takeovers occur at premium to the stock price, owning stock in a likely merger or acquisition candidate can result in a tidy profit once the transaction occurs.

Check out the list of the biggest deals for U.S.-targeted M&A this year, ranked from smallest to largest.

10. Energy Transfer Equity/Regency Energy Partners
Deal Value: $16.47 billion
Deal Value excluding debt: $10 billion
Sector: Utility and Energy

Energy Transfer Partners (ETP), a master limited partnership owning energy assets and is also the parent of Sunoco (SUN), acquired Regency Energy Partners on April 30. The companies announced the complicated merger agreement on Jan. 26, 2015 in which an "indirect subsidiary of ETP, [would merge] with and into Regency, with Regency surviving the merger as a wholly-owned subsidiary of ETP." The transaction was completed on April 30.

 

9.Intel/Altera
Deal Value: $16.59 billion
Deal Value excluding debt: $16.59 billion
Sector: Technology

Intel (INTC) announced its intention to acquire Altera (ALTR) on June 1 -- the latest example of semiconductor industry consolidation. Intel plans to pay $54 a share for Altera -- the company's biggest acquisition ever and under the reins of CEO Brian Krzanich.

Chip giant Intel is "effectively betting $16.7 billion -- equal to its entire cash pile and then some-on its ability to combine its technology with Altera's to create a new class of chips for use in data centers and the so-called Internet of Things," according to The Wall Street Journal.

8. NXP Semiconductors/Freescale Semiconductor
Deal Value: $16.67 billion
Deal Value excluding debt: $11.78 billion
Sector: Technology

Netherlands-based NXP Semiconductors (NXPI) announced on March 2 plans to acquire Freescale Semiconductor (FSL), an even larger semiconductor merger than the Intel/Altera deal.

The combined companies will have an enterprise value of just over $40 billion, combined revenue of more than $10 billion and expected cost savings of $500 million per year, according to a company statement announcing the planned acquisition.

The deal is expected to be completed later this year.

7.Pfizer/Hospira
Deal Value: $17.15 billion
Deal Value excluding debt: $15.93 billion
Sector: Health care

Pharmaceuticals giant Pfizer (PFE) announced plans to acquire Hospira (HSP) a leading provider of injectable drugs and infusion technologies and biosimilars, on Feb. 5, 2015 for $90 a share.

The acquisition of Hospira will "add a growing revenue stream and a platform for growth" for Pfizer's Global Established Pharmaceutical business by expanding into sterile injectable pharmaceuticals, the acquisition announcement said. The deal is expected to be completed later this year. Pfizer expects cost savings of $800 million per year by 2018.

6.AbbVie/Pharmacyclics
Deal Value: $20.99 billion
Deal Value excluding debt: $20.99 billion
Sector: Health care

AbbVie (ABBV) spent a ton of cash to acquire cancer drug maker Pharmacyclics (PCYC). The deal, announced in March and completed in late May, gives AbbVie rights to 50% of Imbruvica's revenue, which is approved to treat two kinds of blood cancer. (Johnson & Johnson (JNJ) gets the other half.)

 

5.Mylan/Perrigo
Deal Value: $35.3 billion
Deal Value excluding debt: $34.11 billion
Sector: Health care

No year would be complete without a little takeover drama.

Generic drugmaker Mylan (MYL) announced a proposed cash-and-stock bid of $205 per share for Perrigo (PRGO) on April 8, which the Dublin-based company rejected.

Mylan, which is incorporated in the Netherlands but has operations in the U.S. based out of Pittsburgh, upped its offer on April 29 -- days after Teva Pharmaceutical (TEVA) announced its own takeover offer for Mylan.

Perrigo, which has also operations in the U.S., once again rejected Mylan's offer saying that the revised offer -- equaling $202.20 per share by its calculations -- is lower than the original rejected proposal which had already "significantly undervalued the company and its future growth prospects and was not in the best interests of Perrigo's shareholders," according to a statement it made on April 29. The takeover fight continues (see Teva/Mylan slide).

 

4.Avago Technologies/Broadcom
Deal Value: $36.57 billion
Deal Value excluding debt: $36.57 billion
Sector: Technology

Continuing the semiconductor consolidation trend, Avago Technologies (AVGO) announced on May 28 plans to acquire Broadcom (BRCM) for $37 billion. The agreed upon semiconductor deal values the combined company at $77 billion in enterprise value.

 

3. HJ Heinz/Kraft
Deal Value: $45.44 billion
Deal Value excluding debt: $36.7 billion
Sector: Food & Beverage

H.J. Heinz and Kraft Foods Group (KRFT) announced its intent to merge on March 25, in what will create the fifth largest food company in the world with revenue of about $28 billion. Warren Buffett's Berkshire Hathaway (BRK.A) and 3G Capital, the owners of Heinz, will end up with a 51% stake in the new Kraft Heinz company. Kraft shareholders will receive the other 49% stake and a special cash dividend of $16.50 per share - amounting to $10 billion that is being funded by Berkshire Hathaway and 3G Capital, when the deal is completed this year.

This is the second large deal the two firms have done together, the other being Burger King's (Restaurant Brands International (QSR)) acquisition of Tim Horton's. Buffett has already said to expect more deals involving the two firms together.

2. Teva Pharmaceutical/Mylan
Deal Value: $50.97 billion
Deal Value excluding debt: $42.97 billion
Sector: Health Care

In the middle of the ongoing takeover drama between Mylan and Perrigo, Teva Pharmaceutical (TEVA) made a takeover offer for Mylan in late April. Mylan has refused Teva's offer. Teva wants Mylan to drop its bid for Perrigo, according to The Associated Press.

As of Thursday, Israeli-based Teva, which has U.S. operations, has upped its stake in Mylan to above 3%, according to Bloomberg.

If Teva succeeds in its bid for Mylan, the combined company would be the world's top-selling generic-drug company, with more than $30 billion in annual sales.

 

1. Charter Communications/Time Warner Cable
Deal Value: $79.59 billion
Deal Value excluding debt: $56.8 billion
Sector: Telecom

After Comcast's (CMCSA) failed attempt earlier this year to acquire Time Warner Cable's (TWC), Charter Communications (CHTR) stepped in and announced on May 26 that it had secured a deal with the New York-based pay-TV operator that values each Time Warner Cable share at $195.71, based on Charter's stock price on May 20.

Charter simultaneously announced plans to acquire Bright House Networks, the country's 7th largest cable-TV operator, for $10.4 billion.

The combination of Charter, Time Warner Cable and Bright House will create "a leading broadband services and technology company serving 23.9 million customers in 41 states," the companies said in a statement announcing the transaction.

If approved, the deal would allow cable-TV media mogul John Malone to reclaim a major stake in the U.S. Pay-TV market, a business he helped to create more than 40 years ago. Malone through his company Liberty Broadband is Charter's largest shareholder.

 

 

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