M&A activity set to increase by 6% in second half of 2013
13 September 2013
- Deloitte forecasts 14,652 M&A deals worldwide in the second half of 2013
- ONS data shows UK deals up 40% in past three months compared to first quarter
Global M&A activity is forecast to increase by 6% in the second half of 2013, according to the Deloitte M&A Index. With recent large M&A deals, the stage is set for up to 30,000 transactions before the end of the year.
Richard Lloyd-Owen, M&A services lead, comments:
“The M&A market has been in relative slumber for some time now, but there are signs that it is finally waking up. Our M&A Index projects a positive upturn in transactions globally in the second half of this year. This is led by a resurgence in deal activity in the US and the confidence boost provided by the Eurozone finally exiting recession.
“However, the excitement from recent megadeals does not automatically translate into a sustainable M&A boom. Indeed, we expect M&A activity for the full year to remain broadly flat when compared with 2012. In the UK, we saw a very slow first quarter by deal volume which has improved considerably in the last three months.
“Many have trumpeted the ‘return of M&A’ before, but this time around the firepower is now there as companies have cash or can get debt if needed. It will be down to shareholder confidence to help break the cycle that has prevented deal volumes getting off the ground.”
The M&A Index highlights four factors that will impact deal volumes to come:
- Corporate health is very good, in terms of cash reserves
- Credit remains ‘on tap’ in terms of raising capital for debt or for M&A
- Deal premiums are at a five year low as shareholders seek the best deal
- Advanced economies are likely to use their currency strength to do deals in emerging markets.
Richard Lloyd-Owen concludes: “This has been an exceptional week for deal making, but there are longer-term factors which should at least facilitate at least a recovery in M&A if not a boom. Either way, doing the right deal has always been a good answer to the strategic priority of finding growth.”
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.
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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"The M&A market has been in relative slumber for some time now, but there are signs that it is finally waking up. Our M&A Index projects a positive upturn in transactions globally in the second half of this year." - Richard Lloyd-Owen, M&A services lead