Global M&A market resets - will there be a change in investor confidence?

That’s particularly true in the U.S. and MENA where values have fallen by over 40% and 50% respectively when compared with the stellar levels of 2019.

Western Europe has seen value increase by 14% thanks to some large transactions in Q1, yet volume here is also down sharply.

Global M&A Q3 2020 snapshot

Change in the air?

But, as we head into a new season, are we seeing a significant change in activity and investor confidence?

That seems to be the evidence according to the figures, which show:

• Deals between USD5 billion and USD10bn totalled USD307.9bn, up 23% compared to Q3 2019 and at a two-year high*
• U.S. dealmaking totalled USD429.6bn during the third quarter of 2020, tripling Q2 2020 levels by value and registering a 27% increase in volume*
• Asia's share of the global market is up to 31%, while Western Europe's share is 25% and the U.S. 35%

New criteria for deals

Our report supports this picture of a change in sentiment and activity.

It also shows that investors are applying new criteria when doing deals, focusing on demonstrably resilient sectors that have a good chance of staying that way and steering clear of those that don’t.

With the global economy in such a weakened state, there is a question mark over how sustained any bounce back will be.

The rest of the year will undoubtedly remain challenging, but there are reasons to be hopeful.

^{* Global Mergers & Acquisitions Review, First Nine Months 2020, Legal Advisors, Refinitiv, October 2020.}