The Deloitte M&A Index 2017

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The Deloitte M&A Index 2017

Dealing with the future

Despite the big shifts in political tectonic plates in 2016, M&A markets managed to hold up well. The year ended with $3.2 trillion worth of announced deals, about 16 per cent down on the record-breaking figure in 2015, but still a high performing year out of the last ten.

A characteristic trend of 2016 was companies increasingly turning to M&A and corporate venturing to harness the growth potential of new, disruptive technologies. A host of new consumer offerings that blur the boundaries of traditional sector lines – FinTech and HealthTech are two such examples – provide new avenues for companies to explore in their quest for growth. The M&A spend on disruptive innovation-related sectors reached $291 billion in 2016, four times the $72 billion in 2012.

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Sector outlook

Outlook for sectors and regions
In 2016 around $1.04 trillion worth of cross-border deals were announced, accounting for 36 per cent of total global M&A deals, the highest proportion since 2012.

The TMT sector dominated the M&A markets in 2016, accounting for 8,577 deals, $694 billion in deal value. Read how other sectors performed in this chapter.

2017 M&A outlook

Uncertainty is the 'new normal'
Economic and political uncertainty is set to be a central theme for 2017 and will impact M&A deal flows and corporate confidence. However, the M&A Index also shows that uncertainties create opportunities with bold, decisive moves potentially resulting in successful deal-making.

Creating shareholder value through divestments
In 2016, $200 billion worth of divestments were announced. The M&A Index shows that companies are actively divesting assets to refocus on their core businesses and bolster post-acquisition balance sheets. We look at what divestments activity we might expect to see in the next 12-18 months.

Fuelling growth through innovation
Companies are increasingly turning to M&A and corporate venturing to harness the growth potential that new, disruptive technologies are enabling. What results are a host of new consumer offerings that blur the boundaries of traditional sector lines as companies use the technology associated with one sector to disrupt another.

About the M&A Index

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.

The Deloitte M&A Index is created from a composite of weighted market indicators from four major data sets: macroeconomic and key market indicators, funding and liquidity conditions, company fundamentals, valuations.

Each quarter, these variables are tested for their statistical significance and relative relationships to M&A volumes. As a result, we have a dynamic and evolving model which allows Deloitte to identify the factors impacting dealmaking and enable us to project future M&A deal volumes. The Deloitte M&A Index has an accuracy rate of over 90% dating back to Q1 2008.

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