Mega deals push up volume
Global proceeds from initial public offerings (IPOs) stood at $79.6bn so far this year via 564 flotations, with 31.0% of the volume generated by 10 mega deals over $1bn. This is the highest contribution by such deals as a share of total IPO volume since 2014 YTD, when they accounted for 32.7%.
Boosted by a strong carve-out wave in the Americas and Europe, and the recent flotation of Foxconn Industrial Internet, $1bn+ IPOs generated an aggregate $24.7bn in 2018 YTD, a 102% increase compared to the same period last year in proceeds and 67% in activity.
Although US stock exchanges raised the highest proceeds from mega deals in 2018 YTD ($9.7bn via 4 IPOs), the largest IPO of 2018 so far went to Germany. The Frankfurt Stock Exchange raised $6.8bn via 2 carves-outs, with Siemens’ chart-topping $5.2bn carve-out of its health unit, the largest since RWE’s carve-out of Innogy SE in 2016.
Threats of a trade wars, technological wobbles, and growing geopolitical uncertainty had an impact on total global IPO activity this YTD. However, mega deals boosted volume to its highest level since 2014 YTD.
With mega deals having a solid aftermarket performance—currently up 6.17% on average—and the Dow Jones Industrial Average closing up 17.41% year-on-year on Friday, May 25 (to 24,753.09), investors are feeling more confident.1 Even as market uncertainties remain, a pipeline of billion-dollar IPOs is building.
What’s on the table
The pipeline includes state-owned wireless infrastructure operator China Tower Corp and smartphone Chinese maker Xiaomi, which are expected to raise $10bn each through their Hong Kong listings. Together, they would surpass the exchange’s full-year 2017 IPO proceeds of $14.3bn. South Korean Hyundai Oilbank estimates to raise $2bn, only the second oil & gas IPO to be listed in South Korea since Techang Metec’s $2.7bn flotation in 2000.
In Europe, Silver Lake, the selling shareholder of Global Blue, is ready to sell shares worth $1bn, while the Dutch fintech company Adyen expects more than $1bn proceeds—which could be the biggest European IPO of its kind.
1. Aftermarket performance as of May 25, 2018, taking into account the bank holiday in the UK and Memorial Day in the US on Monday the 28th.
– Written by Alexandra Micha
Data source: Dealogic, as of May 25, 2018
Contact us for the underlying data, or learn more about the powerful Dealogic platform.