The Deloitte M&A Index Q3 2015
US companies leading surge in M&A
The Deloitte M&A Index is a forward-looking indicator that forecasts future global M&A deal volumes and identifies the factors influencing conditions for dealmaking.
Key highlights in this edition
- The first half of 2015 has emerged as one of the strongest for M&A, with more than $1.8 trillion worth of deals announced, a 22% increase over H1 2014. US corporates are leading this surge fuelled by a strengthening dollar, low funding costs and strong earnings.
- Growth markets are making an impact and in 2014 for the first time outbound M&A from growth markets into G7 countries surpassed inbound M&A from the G7 into those markets, with China leading the way.
- However in Europe despite favourable credit conditions and strong corporate earnings, political and currency risks are weakening confidence among European companies.
- The Deloitte M&A Index predicts that M&A activity will remain at a similar level to Q2. We expect market conditions to remain favourable and Boards to continue reorganising to pursue growth.
US deal making is on a roll and the corporate sector has been taking advantage of a rise in stock price and the stronger dollar to lead the charge, particularly with cross-border European deals. It is also prompting some companies to take aggressive measures, and we have seen a sharp increase in hostile and unsolicited bids this year. However, within Europe the political risks and currency pressures have dampened the confidence for deal making, which has already fallen compared to last year...However the market credit conditions remain favourable and companies are sitting on record piles of cash, so we remain cautiously optimistic for M&A this year.
Iain Macmillan, UK head of M&A