Global M&A values expected to hit record highs in the first half of 2018

• Global M&A deal values reached US $1.7 trillion in first four months of 2018 and grew at the fastest ever pace. At this rate, Deloitte expects a record H1 2018 
• Meanwhile volumes have not reached similar heights, with Deloitte predicting global deal volumes to remain stable at 24,886 for H1 2018, a modest 1% decline from H1 2017

Global M&A deal values are at their highest since the start of the millennium, totalling US $1.7 billion for the first four months of this year, according to analysis from Deloitte. This means 2018 has already overtaken the $1.3 billion deals in H1 2017, setting a course for a record H1 2018. By contrast, deal volumes are stabilising. Deloitte predicts global deal volumes to remain at around 24,886 for the first half of this year, a fraction below the total of 25,015 reached for the first half of 2017.

Iain Macmillan, Deloitte’s Global Managing Partner for M&A Services and Transaction Services, comments:

“While it is difficult to predict how long this flourish in mega-deals will continue, we are undoubtedly seeing an urgency to spend now. Companies have strong balance sheets matched with robust debt markets. This means those that did not do major deals in the last couple of years are eager to and don’t want to be left behind industry-wide transformations. We expect they will spend their cash assertively to combat economic uncertainties and challenges from disruptive technology.

“Another key driver is shareholder activism which is now spreading across the Atlantic to Europe. The primary demands are centred around portfolio restructuring and growth and innovation investments. We expect this trend to give a major boost to divestment activities. In fact our own research shows 70% of companies expect to make at least one divestment this year. Private Equity will emerge as a strong contender for those assets – they are sitting on nearly US$ 1 trillion of dry powder and are under pressure to invest.”

Disruptive technologies are transforming industries and laying bare well-established business models. Deloitte analysis shows companies spent $634 billion during the last three years acquiring disruptive technologies and using them as a strategic expedient to capture innovation-led growth.

Sriram Prakash, Global Lead for Disruptive M&A, comments:

“Disruption is driving a fundamental shift in M&A strategy, where the non-tech sector is overtaking the tech sector in acquiring technology assets. Last year 60% of such disruptive technology assets were acquired by the non-tech sector.

“Corporate venturing is emerging as a major investment class in its own right. We estimate 30% of the 1000 largest companies in the world have made venture investments and committed $32 billion in funds since 2015.”

-Ends-

Note to editors

All of our analysis is based on Thomson Reuters figures, and our M&A full report is here.

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