Global M&A outlook: there’s no place like home
In an uncertain global environment, cross-border deals have declined by 27% as investors turn their attention to domestic markets to do what are often big, strategic deals, and with the top 10 deals of the year all within one country.
Overall global trends show that deal value and volume are down by around 7% and 10% respectively but despite this, 2019 is still set to be the third strongest year to date in terms of value and the fourth strongest in transaction volume for a decade.
The fact that the market is still so strong when anxieties are rising around macroeconomic issues is proof that many investors are keeping their nerve.
This is underlined by a resurgence in strategic megadeals, which are once again powering the market.
The other clear trend is the continued slowdown in cross-border deals – down by 27% – and the dominance of big domestic transactions, not just in the U.S. but globally, with the top 10 deals this year all homegrown within one country.
Most sectors, with the notable exceptions of life sciences and financial services, are feeling the pressure of these more uncertain times, and it is clear that many investors, notably PE funds, are expecting to see an adjustment in the market in the coming months, although not a sharp slowdown. Next year may well test nerves more sharply, but investors will, we believe, continue to be active, absent significant political or economic shocks.
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M&A Insights - Q4 2019
Companies looking to harness the power of digital technology to transform industry processes or even entire markets are increasingly opting for consortium deals to spread the risks, the costs and, ultimately, the rewards.
Global deal flows
A single deal – the USD69bn acquisition of SABIC by Saudi Aramco – took centre stage during an extraordinary 134% increase in deal values in the MENA region. Read more
Japanese companies are continuing their search for assets across the world, with Japan the third most active acquirer nation, investing over twice as much abroad as China in value terms. Read more
Spotlight on sectors
The USD40bn merger between Fiat Chrysler Automobiles and Peugeot’s owner, PSA, announced in October, comes at a time of escalating disruption in an industry that has remained remarkably stable for decades. Read more
At a time of heightened regulatory and market uncertainty, it’s perhaps surprising to see life sciences and healthcare sector M&A continuing to grow so strongly. Indeed, with deal value up by more than 19%, it was one of only two sectors to record growth in transaction value. Read more
In an overheated and uncertain market, PE investors are becoming noticeably more cautious in expectation of a market adjustment in the coming months, bringing buyer and seller price expectations closer into line. Read more