Global M&A deal activity to top $4 trillion this yearStaff writer ▼ | December 17, 2015
M&A deal values are expected to surpass $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.
Deloitte To be 11,300 deals in the fourth quarter of 2015
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.” ■