Merger and Acquisition Trends 2016
Will the momentum continue?
Each year, Deloitte's US firm surveys 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 the latest report.
- 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.
Download the report for all the findings or the infographic to get an overview.
M&A Trends 2015
In the findings of this report, a vast majority of corporate respondents expected 2015 to be a strong year for M&A. 85 percent anticipated acceleration or at least sustaining 2014’s heady pace, up from 84 percent in last year’s report. Only six percent of respondents expected deal-making activity to decrease.