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Global M&A values hit $457bn in early 2019, with volumes set to slow

22 March 2019

  • Private Equity had its best year since the financial crisis with $765bn worth of deals in 2018.
  • Companies have increased their acquisition spending on disruptive technologies, last year they spent $217bn, up 28% from the previous year.
  • Credit conditions remain favourable and corporates are sitting on record levels of cash.

Global M&A deal values reached $467 billion for the first two months of 2019 according to new analysis from Deloitte. However, the research predicts a slowdown of between 4-7% in M&A deal volumes by the end of the first quarter of 2019, compared to the first quarter of 2018. The prospect of a US-China trade war and a rise in economic and political uncertainties are weighing on the M&A markets.

Iain Macmillan, Deloitte’s Global Leader of M&A services, commented: “The last five years have witnessed an unprecedented bull run in the global M&A markets. However, we might now be entering a late-cycle phase - in 2018 we saw the first year-on-year decline in volumes since 2014.

“In addition, nearly $300 billion worth of deals were withdrawn in 2018 due to a tightening of regulatory requirements globally. In order to alleviate deal risks, acquirers need to consider detailed regulatory risk impact reviews before they initiate deals.

“On the plus side, nearly $1.2 trillion worth of cross-border deals were done last year. Despite the slowdown in deals emanating from China, cross-border deal flows remained strong, largely due to the increased outbound activities from US and Japanese acquirers.”

Companies issued a record $400 billion of bond financing for M&A deals last year, and cash reserves remain high. The private equity sector is sitting on $1.1 trillion worth of dry powder and last year it concluded $765 billion worth of deals, the highest amount since 2007.

Iain Macmillan added: “We do not expect dealmakers to become dormant, with recent data from the ONS showing domestic UK M&A values hitting a ten-year high in 2018. Instead we expect a greater emphasis on mitigating risk, undertaking thorough diligence, reassessing business portfolios, pursuing rapid turnaround interventions and optimising the integration process.”

Companies spent $217 billion acquiring disruptive and innovative technologies last year, an increase of 28% over previous year. While Digital and Analytics are the largest segments, there has been a sharp increase in Fintech, Cyber and Healthtech. Deloitte analysis also shows companies have spent $877 billion since 2015 acquiring disruptive technologies and using them to capture innovation-led growth. 

Sriram Prakash, Global Lead for Disruptive M&A, concluded: “Disruptive technologies are transforming industries and laying bare well-established business models. This is driving a fundamental shift in M&A strategy, where the non-tech sector has overtaken the tech sector in acquiring technology assets. Two years ago 60% of such disruptive technology assets were acquired by the non-tech sector.”


Note to editors

All of the analysis is based on Thomson Reuters figures. The full report from Deloitte, The Future of the Deal, analyses the key trends influencing global M&A markets.

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Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

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