Mergers and Acquisitions in Media, Entertainment and Communications Surged 90 Percent in 2014
Three big deals skewed the year, according to a PricewaterhouseCoopers study.
Three huge acquisitions caused a 90 percent increase in the value of entertainment, media and communications deals in 2014 compared to a year earlier, according to a study from PricewaterhouseCoopers, released Wednesday.
Two of the three big deals that skewed 2014 so much higher — to $176.8 billion compared with $92.6 billion a year earlier — are AT&T's $48.1 billion acquisition of DirecTV and Comcast's $46.2 billion purchase of Time Warner Cable. Both face regulatory scrutiny before they close, but the PwC report includes all announced transactions. The third big deal of the year was Facebook's acquisition of WhatsApp for $19.5 billion.
Because of those massive transactions, deal value surged 90 percent while the number of deals increased just 3 percent to 890 mergers, according to PwC.
The authors of the study noted that "megadeals," defined as acquisitions valued at at least $1 billion, accounted for 90 percent of the overall value of deals in the first six months of the year, but the figure dropped to 60 percent in the second half.
The study attributes the slowdown to three factors: Companies are surveying the market's reaction to "transformative" deals; some are waiting to see if the major deals can gain regulatory approval and close in a timely manner; and companies are reevaluating their digital strategies before making further acquisitions.
Nevertheless, says PwC, in 2014 "we saw numerous transformational deals announced which will likely serve as acatalyst to reshape the future entertainment, media and communications landscape across several subsectors, the impact of which will be felt by consumers for a long time to come."
PwC also says that a rising middle class worldwide "equates to commercial opportunities on an unprecendented scale for traditional and new media players both here in the U.S. and abroad."