Mega deals boost H1 global M&A activity, reveals new report

BY Fraser Tennant

Mega deals across the globe boosted the value of mergers & acquisitions (M&A) activity to bumper levels in H1 2017, with Europe a particular hotspot, according to a report released by Mergermarket this week.

The report, ‘Global and regional M&A: H1 2017’, reveals that although deal volume has remained low, aggregate deal value so far this year has been the opposite – due largely to the significant number of mega deals struck.

The key data in the Mergermarket report shows that: (i) 17 mega deals have been announced since the beginning of the year (including Amazon’s recent takeover of Whole Foods), as companies look to ‘future-proof’ in the wake of rapid change to technology and politics to keep ahead of rivals; (ii) the consumer sector has seen six megadeals in H1 2017, in comparison to just one during the entirety of 2016; (iii) European M&A has surged ahead, securing 32.3 percent share of global value, while both the US and Asia Pacific have seen their share drop; and (iv) the energy, mining & utilities sector has been the most targeted industry, partially fuelled by some stabilisation of oil prices.

 “The first six months of 2017, and particularly the second quarter, has seen a clear resurgence in European M&A activity,” said Jonathan Klonowski, Europe, the Middle East and Africa (EMEA) research editor at Mergermarket. “The year started with worry over potential populist shocks but there now appears to be greater confidence in the market.

“M&A activity in the first six months of 2017 has seen firms look to adapt to changes, both in terms of politics and technology. The result has seen values increase to $1.49 trillion, an increase of 8.4 percent despite there being 1117 fewer deals in comparison to H1 2016. A key driver of this has been the increase in megadeals (with a value of $10bn) – with 17 in the first half of this year in comparison to 14 in H1 2016.”

Additional findings in the report are that the US and Asia have stagnated slightly, and despite the year starting with worry over potential populist shocks, there now appears to be greater confidence in the market following elections in France and the Netherlands.

Mr Klonowski concluded: “While volumes remain relatively low, values have continued to soar and there is no obvious reason why this should not continue for the rest of the year.”

Report: Global and regional M&A: H1 2017

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