Mergers and acquisitions (M&A) activity in the marketing space has been at a three-year high in the third quarter of 2018 in the Asia-Pacific (APAC) region. The region comes second only second to North America in marketing M&A in Q3, according to a recent report by Results International Group, a leading M&A advisory firm.

Increased M&A activity in marketing in Japan and China has been attributed to be a prominent reason for the region’s performance. While 277 such deals have been inked in North America so far this year; Western Europe follows with 125, and APAC coming in close at 111 deals. Globally, a total of 178 cross-border deals have been made so far. While Japan was the most active country in the APAC region, with 13 transactions and 20 buyers, China witnessed many valuable deals in Q3. The UK witnessed stability in its M&A activity, as target and buyer activity remained consistent with last year’s trends. 

Highlights of the global M&A activity from the marketing industry in Q3 2018:

1. The $377 million acquisition of Mega-info Media by Luenmei Quantum in China was the most valuable deal in China in Q3. 
2. Both Dentsu and WPP have emerged as the most active buyers in the marketing communications (marcoms) industry, as both have completed five deals in Q3. 
3. Salesforce acquired Datorama for nearly $800 million.
4. Accenture and Deloitte made one acquisition each in Q3.
5. IPG acquired Axciom Marketing Solutions for $2.3 billion.
6. Full service digital and healthcare agencies recorded the maximum growth. Huntsworth acquired two healthcare agencies; namely, Navience Healthcare Solutions ($24 million) and Giant Creative Strategy ($72.2 million).
7. Five acquisitions were made in the sports marketing space, and the gaming company Keywords Studio acquired three gaming marketing agencies in Q3.
8. A total of 21 deals were struck in the UX and design industry and 20 deals were made in media. Boston Omaha took over Watt Outdoor ($82 million) and Key Outdoor ($38 million). 
9. 49 private-equity backed deals were made in Q3, bringing the year’s total to 138 – the highest since 2014.
10. The report predicts that private-equity money will see a further rise in investment in marcoms and martech (marketing-tech) domains. For instance, Adobe is acquiring Marketo from Vista Equity for $4.75 billion.
11. The report says that the spike in M&A activity in the current quarter and year is a short-lived phenomenon, as opposed to a permanent trend since major businesses want to “broaden their strategic offering”.

Julie Langley, Partner at Research International, says, “Some of the traditional media formats have been re-energised by digital and location-based technology and a number of buyers are looking to acquire that expertise... Looking forward, we’d expect the big consultancies to come back into the market and fight with both the networks and the raft of new buyers for the best assets.”

The results of the report indicate that organizations in the marketing-communication industry are being increasingly acquired by leading names in a bid to strengthen their digital marketing strategies. Furthermore, they are also recognizing the need to consolidate and pool their resources in order to adapt and become more agile. These findings mirror the upheavals that most industries are witnessing, owing to the increasingly digital and automated nature of work. Going ahead, it will be interesting to see how businesses, new and old, view merger and acquisitions a strategy to become future-ready and ride through disruptions.