Global M&A deal activity to top US $4 trillion this year, the highest value since 2007
10 December 2015
- Deloitte’s M&A Index predicts Q4 deal volumes to increase by 12% on Q3
- Divergences in economic growth, monetary policies and corporate performance to define M&A in 2016
M&A deal values are expected to surpass US $4 trillion for 2015, according to analysis from Deloitte. The M&A Index predicts there to be 11,300 deals in the fourth quarter of 2015, up by 12% on the third quarter. This would generate a total of 42,800 deals for the year, slightly up on the 41,900 deals achieved during 2014. This year, while the recovery was emphatic in major deals, with three of the five largest deals in corporate M&A history announced, it was notably less pronounced in terms of volumes, reflecting subdued activity in the mid-market, particularly in Europe.
Iain Macmillan, head of global M&A at Deloitte, commented: “As this record breaking year draws to a close, concerns over global growth are back, along with a divergence in economic and monetary policies. Also, variations in corporate performance and deal Price-to-Earnings Ratios (P/E multiples) between the US and Europe are creating more opportunities. We expect these conditions to define dealmaking in 2016.”
Cross-border M&A has been a feature throughout 2015, with $1.07 trillion in cross-border deals up until mid-November. European companies have been at the centre of this, participating in just over half (53%) of all announced cross-border deals. Within Europe, US companies have completed $114 billion worth of deals, $44bn of which are in the UK.
Iain Macmillan commented: ”We think cross-border activity will continue to be a key feature for M&A next year. Uneven economic growth and a slowdown in global trade means companies will need to look far and wide for opportunities. For instance in 2015 we saw more M&A investment come from the ‘emerging markets’ into G7 nations than the other way around. China was the most prominent dealmaker from Asia and Chinese companies invested $65.8bn in outbound M&A, its highest ever levels.”
“We also predict a strong resurgence in Japanese dealmaking, as falling domestic consumption there pushes cash rich companies to look abroad for growth prospects. Indeed, for the first time, Japanese outbound M&A figures at $56.4bn are higher than the domestic M&A figures of $46bn. 2016 will continue to offer strong prospects for dealmakers, however they would need to be alert to the opportunities amidst divergence. We expect a number of the major deals announced this year will also create a further wave of divestments as acquirers streamline their newly enlarged groups.”
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.
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The information contained in this press release is correct at the time of going to press.
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