M&A trends report 2016
Is last year's record pace sustainable?
Coming off a record year for mergers and acquisitions (M&A), an overwhelming majority of executives at US corporations and private equity firms forecast that deal activity will stay strong or even ramp up. What M&A trends are driving their optimism? What factors could potentially put the brakes on? Our third annual trends report asks M&A leaders for their predictions.
We surveyed nearly 2,300 executives at US companies and private equity firms to gauge their expectations, experiences, and plans for mergers and acquisitions in the coming year. While the sentiment and outlook for M&A activity remain favorable, a number of potential obstacles emerged in our third annual M&A trends report.
We are seeing significant optimism around continued M&A activities but global growth concerns have started to dampen the recent pace of activity.
Russell Thomson, national managing partner,
M&A Services, Deloitte & Touche LLP
Download the M&A Trends report for the full results. For highlights, scroll through the key findings below or view the infographic.
Deal activity is expected to remain strong. Almost nine in 10 respondents expect deal activity to continue at the same pace or increase. While private equity investors (PEI) were the most optimistic, they are less bullish than they were a year ago.
Corporate respondents and private equity investors cited economic conditions as the top factor for deal success. Both segments of respondents cited interest rates as the second most important factor, followed by uncertainty surrounding the 2016 US elections.
Corporations see an increase in both smaller strategic deals and major transformational deals. As respondents look at the next 12 months to take advantage of favorable opportunities, 34 percent will look for smaller strategic deals while another 26 percent indicate they will seek major transformational deals.
Companies are holding steady in looking abroad. Both corporates and PEIs are continuing to source foreign targets at the same pace as 2015 (75 percent and 84 percent, respectively).
More divestitures are planned for 2016. Significantly more corporate respondents plan to pursue divestitures this year than in 2015. The drivers? Shed non-core assets in the year ahead, help focus their business, and in some sectors, raise capital.
M&A trends 2016: Is last year's record pace sustainable?
M&A trends key findings
By sector, technology continues to be the most attractive overall industry for both corporate and private equity investor M&A activity in the next 12 months. No surprise as boundaries are increasingly blurring between industry sectors as technology penetrates and reshapes traditional business models. The convergence of technology across industries is adding a new dimension to deal-making.
M&A trends infographic: Will the momentum continue?
In the news
Will 2016 be another year of unlocking deals?
Bloomberg | May 5, 2016
Despite M&A’s slow start in 2016, survey shows executives see pick up this year
The Street | May 5, 2016
U.S. corporations, PE firms bullish on M&A outlook: Deloitte
The PE Hub Network | May 4, 2016
Deloitte | May 3, 2016
Deloitte Services LP
Mergers and Acquisitions Services
Deloitte M&A Institute