Insights from our M&A team, based on M&A activity charts from the White & Case M&A Explorer.
M&A Explorer is a platform that combines an interactive tool with a regular flow of short articles from White & Case partners. The tool enables users to create charts to explore trends in M&A in every country and sector, drawing on more than a decade of data from Mergermarket.
Visit our interactive tool:
The White & Case M&A Explorer is an interactive tool which uses 10 years of Mergermarket data, allowing users to analyze M&A activity by date range, geography and sector to create cross-border and domestic market snapshots.
Table of Contents
PE activity in Western Europe may have dipped in 2019 but this is not the full picture. Buyout activity remains impressive, although exits subsided as PE funds focused on purchases instead of sales.
M&A in the last three months of 2019 gave a respectable performance. And while M&A value in 2019 as a whole fell, activity once again topped US$3 trillion in what remains an abundant deal market.
After signs of a cooldown in 2018, the M&A corridor between in the US and Western Europe is staging a comeback despite challenges.
Despite a slight quarter-on-quarter uptick in Q3, automotive M&A has softened overall in 2019 as the industry faces broad structural changes.
Tech M&A has remained strong in 2019, registering only a moderate decline against a much sharper fall in global M&A.
Private equity exits of all types have fallen, but secondary buyouts have shown the greatest decline, as the buy-side exercises caution and the sell-side seeks to maximize exit value.
The first nine months of 2019 have proved challenging for oil & gas M&A in the face of a volatile crude price and weaker economic growth.
M&A market observers looking for evidence of the recent softening in global M&A activity should look no further than the oil & gas sector.
M&A activity in Latin America and the Caribbean proved robust in the third quarter, bucking the global trend of declining deal activity
The value of M&A in Latin America and the Caribbean totaled US$18.1 billion during the three months to the end of September 2019, a 17% increase on the same quarter of last year. Deal volumes held steady, with 150 transactions recorded over the period, compared to 151 in the third quarter of 2018. This was in contrast to the global M&A picture: both global volume and value fell significantly year on year for Q3.
Despite not being an automotive hub historically, Israel has emerged as a hotbed of innovation for the industry.
While initially disappointing, the US$108.8 billion in total global PE transaction value in Q3 represents a greater proportion of overall M&A activity than in Q2
PE value made up 29% of overall M&A value in Q3, compared to only 26% in Q2. Meanwhile, volume held steadier, falling 15% to 1,113 deals, or 28% of overall deal volume—the same proportion as Q2.
Global M&A is down; Asia, transportation and real estate offer hope.
After quarter-on-quarter gains in Q1 and Q2 this year, global M&A value took a tumble in Q3, registering the lowest quarterly total since Q1 2016. Volume dropped to the lowest quarterly figure since Q3 2013.
Abundant cash reserves appear to contribute to Japanese companies’ continued drive to seek deals overseas.
Japanese M&A has pushed way into record territory lately, but the picture is decidedly one-sided. Rather than activity centering on domestic transactions or foreign buyers seeking a foothold in the Japanese market, it is outbound M&A that has continued to eclipse all other deal types by value.
As activist campaign numbers fluctuate, activists are looking at new geographies and adopting a broader palette of strategies to sustain deal activity.
Return to activity is a positive sign, but the heights of 2017 and 2018 appear to be some way off.
Nordic M&A activity has staged something of a comeback. Q2 2019 witnessed a sharp quarter-on-quarter rise in total value of 198% (to US$25.6 billion) versus a slight 6% fall in volume (to 259 deals), giving reason for optimism. However, while such spikes may be caused by a resurgence in big-ticket deal activity, the largest transaction of the quarter was valued at a relatively modest US$3.6 billion.
Despite ongoing tensions in the region, M&A is up in the Middle East
M&A in the Middle East saw a massive 284% year-on-year rise in value in H1 2019—though this was due in large part to a single deal, Saudi Aramco’s announced US$70.4 billion acquisition of a 70% stake in petrochemical firm Saudi Basic Industries (Sabic).
Ample firepower and increasingly attractive public market valuations should ensure that 2019 is another robust year
After the extension of the March 29 Brexit deadline to October, Western Europe's private equity market staged a frenzied comeback in Q2. Deal volume fell from 510 to 399 deals at the same time that value surged by 88% compared with Q1, to US$78.4 billion. The picture is similar when splitting buyouts from exits.
With tensions between Washington and Beijing ongoing, European investors could be some of the biggest beneficiaries of new legislation
China is opening its doors to foreign investors just as the US has closed its gates to China amid a protracted trade war and a diplomatic stalemate.
Private equity transaction values grow quarter on quarter as dry powder and take privates trend upwards
With money to spend and a desire to compete with their strategic rivals, buyout firms are looking to the public markets for deals
Private equity value for buyouts and exits combined rose to US$227.8 billion in the second quarter of 2019, an 11% rise quarter on quarter. This total came from 1,064 deals, down 8% from the first quarter. Taken separately, buyout activity rose 37% to US$139.9 billion on the previous quarter, while exits fell slightly, from US$102.8 billion to US$87.9 billion.
M&A value rises for the second quarter in a row as dealmakers shrug off global uncertainties such as Brexit and trade tensions—and get back to the negotiating table.
Total global M&A deal value hit US$909.1 billion in Q2, an 11% climb compared to Q1, even though volume fell by 12% over the same period. Despite a volatile economic and political climate, big deals still abound, mostly in the US.
Driven by renewable energy deals, 2018 was a near-record year for the Western European energy market. Despite a slow start, 2019 looks likely to deliver a number of notable sales.
Shopping malls' successful repurposing into co-working spaces suggests the “death of the mall” may be overhyped.
Following three consecutive record years for value, executives expect the bull run to continue in 2019.
While dealmaking value was marginally down year on year, a number of countries are making comebacks
M&A in Africa totaled US$21.1 billion in 2018, a slight drop compared to the US$22 billion recorded in 2017. Deal volume, however, fell more precipitously from 272 in 2017 to 206 in 2018.
A less volatile market, privatization, electoral reforms and new discoveries could all drive the market in 2019
Globally, the oil & gas (O&G) sector saw an increase in M&A in 2018, as oil prices rose throughout the first three quarters of 2018. However, the same cannot be said for the sector in Latin America and the Caribbean. While the global total rose 23% year on year to US$376.5, LatAm value fell 18% to US$6.3 billion.
President Bolsonaro's focus on privatizing state-owned assets could fuel a surge in inbound deal activity
Brazil has become more noted for crises than commerce in recent years. The extensive money laundering and corruption scandal, and subsequent criminal investigation known as “Operation Car Wash,” coupled with a weak economy to taint the country and discourage foreign investors.
Global M&A value makes a recovery in the first three months of 2019 but the decline in volume is marked
In the first quarter of 2019, global deal value totaled USD$798.6 billion, a 9% rise quarter-on-quarter, but nearly 15% below the same period the year before. Meanwhile, volume figures fell by more than 30% quarter-on-quarter to 3,557 deals.
Ever-higher levels of funding have continued to push private equity deal values up, but intense competition for assets has taken a toll on deal volumes
Private equity deal values in first three months of 2019 made a quarter-on-quarter rise of 3.6% to US$202.2 billion. However, in a trend similar to corporate M&A, volume dropped 29% over the same period to 966, the lowest quarterly figure since Q3 2013.
While the oil & gas sector works through a transitional phase globally, oil & gas companies are using M&A to diversify away from oil in the long term—and Asia is no exception
In 2018, oil & gas deal activity in Asia climbed 14.6% over the 2017 total, to US$27.5 billion, despite deal volume remaining flat at 51 deals.
Infrastructure M&A enjoyed a buoyant year in 2018, driven by long-term trends: a shift to renewables, the evolution of disruptive new technologies and significant capital raising
In 2018, the infrastructure sector broke new M&A records—total value rose 36% to US$279.6 billion, with deal volumes up by 3%. On both measures, 2018 represented the busiest year for M&A in the infrastructure industry in the past decade, with deals in each of the renewables, telecoms and transport sectors hitting new highs.
Dealmaking and buyout firms helped break a number of dealmaking records down under, with resources, technology/telecommunications and infrastructure featuring strongly
Australian M&A continued to perform strongly through 2018, with the total value of M&A deals at US$88.5 billion (AU$123.1 billion1) surpassing 2017’s already robust US$85.6 billion (AU$119.1 billion) total and becoming the second-highest total deal value over the past decade.
Foreign deals with the US slowed considerably as China turned its attention to Western Europe in 2018. The trend looks likely to continue through 2019
Considering the headwinds faced by outbound M&A from China—including concerns about a trade war with the US, stricter regulatory oversight in both the US and Europe and a slowdown in the domestic economy—foreign dealmaking held up well in 2018. The 2018 total dropped only moderately when compared with 2017, declining 12.6% to US$94.7 billion.
Deal value in 2018 was well above 2017 levels but growing political and economic instability led to a tail-off in the second half of the year
Given the backdrop of growing political tensions—including rising protectionism around the world, a potential trade war between the world’s two largest economies, and continued uncertainty surrounding Brexit—dealmaking might have been expected to fall this year.
Buyout activity rose to new heights in 2018 despite a slower Q4, and all signs point to a busy year ahead for GPs
It was another banner year for private equity in 2018, as financial buyers put more of their stockpiles of dry powder to work.
Transatlantic technology and media deals steal the headlines, but politics and protectionism have curbed dealmaking in 2018
With a long history of economic cooperation, the US and Western Europe are natural M&A deal partners as both sides look to each others’ markets for expansion opportunities, IP and talent. It’s unsurprising that activity between the regions has been buoyant historically, with more than US$200 billion of deals announced each way for three of the last four years.
Overseas VC funds have been pouring into Chinese startups this year—at certain points, overtaking their US counterparts. What’s the attraction and will it last?
In the second quarter of 2018, for the first time in history, companies based in China secured more venture capital (VC) funding (US$30.9 billion) than their North American rivals (US$27.2 billion), according to data from Goldman Sachs.
This year could see a new record for the number of tech deals between countries, even as macroeconomic and geopolitical uncertainty rises
Despite economic and geopolitical headwinds, cross-border dealmaking across the tech sector remains buoyant, with 681 deals announced in the first three quarters of 2018. Although deal volume was down 11% when compared to the same period in 2017, value remained consistent at US$89.4 billion.
Dealmaking in Mexico has been hit by tough political rhetoric. Now that North America's leaders have settled on a new trilateral trade agreement, and with a new Mexican presidency imminent, Mexico hopes for an M&A resurgence.
M&A in Mexico has been fairly subdued in 2018, perhaps in part due to uncertainty created by drawn-out negotiations on trade policy with the US and Canada. Deal activity began to slow down in 2016 at a time when campaign rhetoric from then-candidate Donald Trump targeted America's trade deficit with Mexico. Rhetoric turned to action when President Trump sought to revise the North American Free Trade Agreement (NAFTA), starting in the first year of his administration.
Political tensions and limited trade wars with the US mean that China is looking to do more deals in Western Europe—but could there be challenges on the horizon?
As the Trump administration moves to limit Chinese inbound deals and the Committee on Foreign Investment in the United States (CFIUS) has become ever more stringent, China has turned its dealmaking attention to Western Europe.
Changes to regulatory and monetary policy and the rise of technology is driving M&A in the banking sector
As M&A markets recovered in the years following the global financial crisis, big banks, dealing with the post-crisis wave of new regulatory requirements, were notably absent from the wave of consolidation. That tide now appears to be turning.
Private equity activity in the real estate sector displayed a solid 2018 start—but challenges remain
After reaching a record deal volume of 47 transactions and a post-crisis high deal value of US$40 billion in 2017, real estate private equity’s bull run has continued right through 2018.
A stable oil price, shale plays and restructuring means that the US energy industry is on a roll that is likely to continue into 2019.
Dealmaking in the US oil & gas (O&G) and power markets has been an uncertain business over recent years, with overall M&A volumes and values characterized by huge swings and volatility.
Momentum in M&A markets could deliver a record-breaking year, provided that trade tariffs do not slow the US and Chinese economies.
Global M&A is set for one of its strongest years on record, following a Q3 in which US$722.6 billion worth of deals were announced. This represents a 0.5% increase compared with the same period in 2017. However, volume was down on the same period last year by 20%, or by 988 deals.
Buyout firms are making super-sized acquisitions in order to put large amounts of capital to work for investors.
Private equity deal value hit a post-crisis high through the first three quarters of 2018—climbing 2.3% compared to the same period last year to reach US$405 billion. Strong performance by PE has made it an attractive asset class for investors, ensuring that capital has continued to flow into PE funds.
Capital is flooding into the US technology space as buyout firms go head-to-head with strategics in M&A and VCs in later-stage investments
Private equity (PE) activity in the US tech space is on a tear. Following a record-breaking 2017 in which 547 PE deals were completed, the first half of 2018 is claiming its own record. A total of 289 tech deals valued at US$43.3 billion were announced in H1 2018, marking the highest half-year volume to date, and a 70.9% increase in deal value compared with H1 2017.
Policy changes in Seoul and Washington are creating incentives for South Korean firms to invest in the US
South Korean companies are taking a keen interest in the US market. So far this year nine deals have been recorded, a stable continuation in volume from 2017 when 19 deals were announced, the highest figure on record.
The surging Nordic region stakes its territory as one of the most successful private equity markets in Europe
The private equity industry in the Nordic countries has come of age, increasing its share of both buyout and fundraising activity in Western Europe over the last decade. The reliably rising market stands as testament to the long-term value of a Nordics investment culture widely regarded as very stable and predictable.
M&A targeting the Japanese tech sector achieved a record volume in H1, while the emerging trend of shareholder activism holds both positive and negative effects for the industry.
A powerful mix of political, economic and demographic factors has resulted in a record level of inbound M&A activity targeting Japan’s tech sector.
Inbound M&A into the US tech sector has dipped following heightened scrutiny on Chinese deals, while Germany and the UK are looking to follow suit.
Technology M&A targeting US firms appears to be bearing the brunt of the US administration's protectionist measures. Since President Trump took office, the Committee on Foreign Investment in the United States (CFIUS), the body responsible for reviewing the national security implications of foreign investments in US companies, has been more active than ever in challenging deals, often technology-heavy assets pursued by Chinese acquirers.
Against the backdrop of an increasingly regulated global M&A landscape, Chinese firms have adapted their dealmaking strategies when looking abroad.
The value of foreign deals made by mainland Chinese companies abroad is sharply up on last year’s figures: At US$63.0 billion in the first half of 2018, it was 45.5% higher than for H1 2017.
Companies are turning to M&A to gain valuable AI capabilities while AI technology transforms the deal process.
The power of artificial intelligence (AI) is fundamentally changing the way in which corporations operate. Healthcare providers are using it to process medical scans and x-rays, online retailers are using it to analyze customers and generate buying recommendations, and car manufacturers are using it to develop autonomous vehicles. Few industries will be untouched by AI, and many will be transformed by it.
Following a challenging period, local and overseas dealmakers are gaining confidence investing in the region.
While the region has experienced significant political turbulence of late, Latin American (LatAm) dealmaking appears to be turning a corner. Positive political changes are spurring economic growth and, according to BBVA research, this is set to increase from 1.2% in 2017 to 1.4% in 2018, and even to 2.5% in 2019.
M&A activity accelerated as the year progressed, with dealmakers shaking off market uncertainty to secure groundbreaking deals.
In the first half of 2018, global M&A soared to levels not seen since 2007. The second quarter built on a strong foundation secured in Q1, increasing by 12.4% to reach US$1.01 trillion—the first time quarterly deal value has topped the US$1 trillion mark since Q4 2016 (US$1.02 trillion).
Dealmaking continues despite intense competition, with skyrocketing prices pushing activity toward the top end of the market.
While heightened competition and rising valuations may be raising concern among some, private equity (PE) continued to perform strongly in the second quarter of 2018. A total of US$267.5 billion-worth of buyout deals announced over the first half of the year secured a post-crisis high, with aggregate value increasing 23% between the first and second quarters. A 7.5% slide in deal volume indicates a focus on big-ticket deals, as soaring premiums cause prices to skyrocket.
We take a look at the top five trends driving private equity activity in 2018.
Global private equity activity is on a roll. In 2017 the industry announced 5,224 transactions, an annual record for volume, while the US$879 billion worth of deals marked a post-crisis high. After a banner year, the asset class has shown no signs of slowing down in 2018—US$181.24 billion changed hands in the first three months of the year, marking the highest Q1 deal value since 2007.
Strong interest from overseas buyers drove Australian M&A to a record high in 2017, yet closer regulatory scrutiny of foreign investors is a potential concern.
The Australian M&A market delivered its best year on record for deal volume in 2017, with 613 deals worth US$85.49 billion announced over the year, up from the 517 transactions worth US$65.9 billion in 2016.
With oil prices recovering and greater pricing certainty bringing a quiet optimism to the market, the pieces are in place for oil & gas M&A to return to the fore in 2018.
Since the oil price crash that took hold in 2014, global oil & gas M&A figures have been muted.
With Brexit moving closer, UK firms are increasingly diverting their M&A investment across the Atlantic.
UK firms are investing in US firms at an impressive rate. In 2017, US$109.3 billion was invested across 168 transactions—a record year both in terms of value and volume. On a dollar basis this far exceeds even the peak of the credit boom in 2007, when British companies backed US$60.5 billion worth of US acquisitions.
While diplomatic relations between the US and Germany may have cooled under Trump’s presidency, German dealmakers are investing more in US M&A than ever before.
German investors took part in a record level of M&A deals outside their borders in 2017, securing 394 outbound dealsworth US$39 billion over the year. The US attracted the majority of this activity, both by value and volume, with 77 announced deals worth US$11.6 billion targeting US firms marking a record annual volume.
China plans to consolidate its three merger and antitrust agencies into a single body. What does this mean for dealmakers?
The ongoing evolution of China’s state ministries may have significant implications for dealmakers.
While Taiwan traditionally attracts global attention for its semiconductor assets, local firms are increasingly looking to move into markets overseas.
Taiwanese companies are stepping up their presence in the global M&A market. The value of M&A transactions undertaken by local firms investing abroad in 2017 reached a record high, with US$7.25 billion spent across 28 deals. The first quarter of 2018 indicates another record annual deal value may be on its way, with US$2.63 billion already spent on overseas transactions.
Macron's bold vision for Europe has translated into a flurry of dealmaking activity as French firms seek growth abroad.
France is opening its eyes to a more inclusive, grander vision of Europe in which France takes center stage. Year-end 2017 M&A figures reflect this change, painting a positive picture for the months ahead. French acquirers invested US$113.4 billion across 502 deals outside the country's borders over the year, an all-time record annual volume for outbound transactions.
Peak funding conditions experienced in 2017 continue to boost investor sentiment, but challenges loom.
In the first quarter of 2018, global private equity activity picked up right where it had left off in 2017, which saw a record volume of transactions. In the first quarter of the year, a total of US$113.7 billion was invested in 699 buyout deals—a 27% climb in value compared to Q1 2017, and the strongest start to a year since 2007.
A record-setting first quarter of 2018 has laid the foundation for another blockbuster year of dealmaking, with US M&A in full swing and disruptive market entrants continuing to fuel activity.
Global M&A in the first quarter of 2018 saw a total of 3,776 deals worth US$890.7 billion, marking an 18% value increase compared to Q1 2017, and the highest deal value achieved in a first quarter on record.
Asset shortages and rapid technological change are forcing many to rethink what "infrastructure" really means.
From airports to power grids, infrastructure assets are increasingly sought by investors worldwide. The asset class offers attractive returns, reduced volatility, stable cash flows, inflation-linked revenues and diversification advantages.
Private equity funds targeting the region shook off political and economic change to deliver a record 2017, while economic recovery and reforms in key markets prophesy a strong 2018.
The Latin American and Caribbean private equity (PE) market enjoyed a record-breaking year in 2017. A flurry of activity in the region saw the industry secure 103 deals over the year, reflecting intensifying competition for assets.
A push for greater regulatory clarity combined with the One Belt, One Road initiative could pave the way for an increased focus on overseas dealmaking in 2018.
At first glance, it would appear that Chinese buyers lost their appetite for foreign dealmaking in 2017. Corporations and private equity funds operating in Asia's largest economy were responsible for 361 outbound deals worth US$125.14 billion over the year, with value decreasing by 37.2 percent compared to 2016.
Three trends—including increasing pressure from clients—may drive PE firms to improve gender balance within their ranks and promote more women to senior positions in the field.
US buyout activity hit an all-time high in 2017, and a post-crisis high for value, with a total of 1,176 announced deals adding up to a total of US$190.76 billion. A new record was also set for global buyout volume, while global value similarly reached a post-crisis high.
Media M&A deal value hit its second-highest year on record in 2017, as the need for traditional media groups to build scale led to a number of market-defining deals.
Rapid consolidation across the media industry is pushing a series of landmark megadeals over the line. In 2017, there were 555 deals globally across the sector worth US$131 billion—the second-highest value total since 2008.
A shakeup within the consumer industry generated a flurry of deals in 2017. We track three influential trends that will continue to drive activity in 2018.
A fundamental shift in buying habits is driving M&A activity in the consumer sector. In reaction to a growing “on-demand” culture—where customers are expecting products and services delivered instantly—firms are using M&A as a strategy to rethink business models.
We look at the major trends driving global M&A through 2017 and into 2018: resurgence in the energy sector, resilience among UK dealmakers and an increasing appetite for overseas acquisitions by US firms.
The value of global M&A activity in 2017 was down slightly compared to 2016, continuing at a less frenetic pace than in 2015, a record breaker. The number of deals was also down, remaining just below the record set for volume in 2016.
Buyout volume in 2017 reached a record high, and deal value reached levels not seen since the financial crisis. Meanwhile intense competition for assets is causing sellers to demand higher multiples.
Private equity enjoyed a banner year in 2017. Record levels of dry powder flooded the market in 2017, reaching an all-time high of US$954 billion in September, according to research group Preqin. This prompted intense competition for assets which in turn pushed up valuations.
From payment processing to NPLs, the private equity industry is stepping up its role in dealmaking within the financial services sector
The financial crisis provided an opportunity for private equity firms to gain a foothold in the financial services space, and they haven’t looked back. As the opening figure shows, 2015 was a landmark year for sponsors, who had traditionally found it difficult to thrive due to tough competition from strategics within a regulated sector.
Investors are looking to logistics and technology in Southeast Asia’s financial, trade and innovation hub, with sovereign wealth funds and Chinese firms acting as the keenest bidders
When year-end numbers are tallied in a few months, Singapore in 2017 will have set a record for M&A transactions by value, as investors continue to be drawn to one of the most investor-friendly destinations in Southeast Asia.
Motivated by national security concerns, political pressures and a sheer volume of filings, CFIUS is placing increased scrutiny on foreign acquisitions
The Committee on Foreign Investment in the United States (CFIUS) appears to be putting more inbound US M&A deals on hold than at any time in its history. The inter-agency committee, tasked with reviewing the national security implications of foreign investments in US companies, has increased its scrutiny of foreign investment transactions, which has coincided with a drop in inbound activity M&A targeting US firms.
Trump’s trade policies are causing foreign investors to be wary, while a volatile peso is pushing Mexican firms to secure assets abroad
Mexican M&A is at a crossroads. An uncertain political environment, volatile currency and unstable relationship with the US signal an uncertain future for dealmaking within the country. And while the first three quarters of 2017’s value have seen an 18.4% uptick compared to the same period in 2016, volume is still well short of 2016 numbers, with Q3 2017 volume barely above half of Q3 2016’s volume.
Buyout firms bank on rising demand for same-day delivery and technological innovation to drive future returns
A shift in consumer demand is causing buyout firms to turn their attention to the transport and logistics industry. Private equity (PE) investment in the global transportation sector climbed to its highest quarterly value on record in the third quarter, with firms investing US$21.35 billion across 23 deals over the period.
The UK M&A market is weathering the Brexit storm, as strong economic fundamentals continue to draw interest from international bidders
Concerns that Britain’s decision to leave the European Union (EU) would deter foreign investment appear, at least so far, to be overstated. With 155 deals worth US$35.8 billion announced in Q3 2017, inbound M&A activity targeting UK firms topped all other markets in Western Europe by both value and volume. And although deal value has fluctuated over recent years, inbound deal volume into the UK has shown a consistent if small increase, rising from 468 deals in Q1-Q3 2016 to 485 in Q1-Q3 2017.
Regulatory uncertainty, the drive toward consolidation and the constant pressure to innovate will shape dealmaking
M&A activity targeting the US power and utilities sector experienced a rebound in activity during Q3 following a poor-performing second quarter. A total of 27 deals valued at US$33.9 billion was a sevenfold increase in value compared to Q2’s figure and the third highest quarterly value on record.
Record fundraising and growing demand in key sectors helped private equity deal value soar in 2017
The accelerating rate of buyout activity has been a stand-out dealmaking trend in 2017, with deal value hitting a post-crisis peak. So far in 2017, the total value of US$372.1 billion in announced deals (from 2,213 buyouts) stands just 7.7 percent behind 2016’s total value with a quarter left to run.
Global M&A decreased in the third quarter, despite generally robust economic fundamentals
Although the financial markets were generally strong during Q3 2017, global M&A activity decelerated, with 3,857 announced deals worth US$673 billion reflecting a 14 percent decrease in value compared to Q2 and a 24 percent value decrease as compared to the same period in 2016.
We round up the major stories in the world of dealmaking from the past quarter including a China downturn, an aerospace upswing and an oil price turnaround.
Private equity investment in real estate shot up sharply in Q2 2017, as dealmakers look to deploy dry powder in increasingly sizable deals
Private equity real estate deal value for Q2 2017, including exits, climbed four-fold on Q1 numbers to reach US$11.96 billion. Deal volume was up materially too, rising from five deals in Q1 to 14 deals in Q2. The strong performance makes Q2 2017 the highest-valued second quarter for private equity real estate deal value since the financial crisis.
Germany achieved a record for M&A deal value in Q2, with industrial deals dominating the market
Despite uncertainty around the federal election coming on September 24, there is a healthy appetite for German assets. Germany saw its highest quarterly M&A value on record in Q2, climbing to US$63.2 billion in the three months to the end of June. M&A activity was buoyed by continued economic growth (in its June economic forecast, the OECD projected “solid” GDP growth of 2.3% for the year and a further decline in unemployment).
Shareholder activism is moving into the mainstream as activists launch ever-bolder campaigns
Increasing investor activism is driving M&A-related activity in Europe and North America, from outright acquisitions of companies targeted by activists to divestiture and spin-off announcements.
Changing consumer habits and disruptive innovations are inspiring mergers designed to combine the best features from virtual and concrete retailers.
Consumer sector M&A is looking good. In H1 2017, the sector recorded the highest value from cross-border M&A deals of any sector, with US$142.5 billion spread over 300 deals. Add domestic deals, and the consumer sector takes second place with US$241.8 billion. Cross-border value in the first half of 2017 has already outstripped the whole of 2016, which saw US$118.4 billion in deal value across 691 consumer deals.
The region secured a host of megadeals despite political volatility, with EU powerhouses leading the way.
Western European firms continue to command high price tags—even against a backdrop of political uncertainty. There were 1,285 deals worth US$254.7 billion announced in Q2, a steep rise in value compared to the previous quarter. The region fared well from a global perspective, with its share in global deal value shooting up from 25.6% in Q1 to 35.6% in Q2.
Activity was up compared to Q1 2017, but deal value was down by more than half from the peak of Q4 2015.
There were 381 deals by Chinese bidders valued at US$94.6 billion in the second quarter of 2017. While that represents a scant five more deals than in Q1, it also shows a value jump of 34%.
Global buyout activity defies market uncertainty to reach a post-crisis high, as funds deploy record levels of dry powder.
Buyout activity delivered a stellar performance in Q2. There were 707 deals worth US$144 billion, up 75 percent by value from the previous quarter to reach the highest quarterly value since Q2 2007. PE’s attraction as an asset class to investors worldwide is resulting in record levels of dry powder generating substantial PE M&A activity. Research firm Preqin estimates the current amount available for investment at US$842 billion.
Despite a slight dip in value for the quarter, deal value is up year-to-date, compared to H1 2016
After a steady first quarter, global M&A dipped in Q2 against a backdrop of ongoing political and macroeconomic uncertainty. Volume fell from 4,304 deals in Q1 2017 to 3,683 deals in Q2—the lowest quarterly volume since Q2 2013. Meanwhile, a Q2 value of US$715 billion saw a 4.4 percent decrease compared to the same period last year.
Innovation is at the heart of the boom in Israeli M&A and the trend is set to continue, according to an exclusive new survey of senior Israeli dealmakers
Disruption and innovation are driving deals to new heights in the Israeli M&A market. In 2016, there were 99 deals with an Israeli target worth a total of US$20 billion, a record in value terms and a joint record (shared with 2015) by volume.
As oil prices stabilize around the US$50 mark, dealmakers are coming back to the table
Buoyed by the arrival of a pro-oil administration in the White House and relative price stability, M&A activity in the beleaguered oil and gas sector is beginning to regain some momentum.
French dealmakers announced significant outbound megadeals in the first quarter; Macron's victory could provide a much-needed boost for inbound deals
In a deal landscape dominated by cross-border consumer megadeals, French businesses announced US$47.63 billion worth of deals in the first quarter of 2017—the highest value quarter since Q3 2008. This is perhaps surprising, given the uncertainty that persisted throughout most of the quarter regarding the outcome of the contentious French presidential election.
Auto sector M&A just hit a seven-year high. But the future could be even brighter, as technology firms seek opportunities within the auto industry
The automotive sector has staged a remarkable comeback. Worldwide car sales grew by 4.8% in 2016 to US$88.1 million, the highest figure for at least a decade, according to data from investment bank Macquarie.
PE funds establish themselves within the emerging South Korean market to take advantage of local growth opportunities
Private equity buyouts in South Korea reached their highest first quarter valuation in more than a decade, with US$3.47 billion spent across 12 transactions. This figure represents a 31% value increase compared to the same period in 2016 (US$2.65 billion, 13 transactions), and a strong recovery from a discouraging US$0.87 billion value in 2016’s third quarter.
A rash of high-priced buyouts and a bid for a popular asset manager ramp up value at the start of the year
The financial services industry saw a 29 percent jump in year-on-year deal value in the first quarter of 2017. It was also the second-highest Q1 since 2011, which augurs well for the year ahead. Deals totalled US$55.8 billion in Q1 2017, compared with US$43.3 billion in the same period last year.
Inbound megadeals in the energy sector and a buoyant technology market help the deal market flourish
With deals valued at US$18.2 billion, Q1 2017 was the fourth-highest quarter in Indian M&A history. This comes on the back of a blockbusting 2016, which saw deal value hit US$66.4 billion—the highest year on record.
Spurred by semiconductor company consolidations, TMT activity dominated both inbound and outbound dealmaking
The 2017 kickoff in Taiwan M&A showed the second highest Q1 deal volume since Q1 2010, with 13 deals. This matched the Q1 2016 total - which itself was a busy year for M&A in Taiwan.
Despite economic volatility, uncertain elections and the Brexit effect, average valuations rose, year on year
Although the number of M&A deals fell in Q1, dealmakers looking at Western Europe are still willing to pay for the right target—2017 saw the second highest Q1 value for the region since 2008 (with Q1 2016 taking the top spot).
Megadeals from the UK and Japan help the US kick off the year in style
US dealmakers, both as sellers and bidders, have had an encouraging start to the M&A year. Deal value targeting the US (including domestic deals) was up by 21% year on year – from US$251.3 billion in Q1 2016 to US$303.1 billion in the first quarter of this year. The boost from megadeals meant that value rose even as the number of deals fell by 8% year on year.
Consumer sector and cross-border deals boost the M&A market
A number of factors spread uncertainty across the geopolitical spectrum in the year’s first quarter, including the official kick off of the Brexit process in the UK and the challenges faced by the new Trump administration in the US. Yet dealmakers seemed to shrug off the uncertainties. Cross-border deal value hit US$341.9 billion, the second highest first-quarter amount in the last decade after Q1 2008. Overall deal value for Q1 2017 stood at US$693 billion – the second highest Q1 since 2007 (behind Q1 2015, a record-breaking year).
PE buyouts hit new heights in Asia-Pacific in 2016. And this trend looks likely to continue
The Asia Pacific region recorded its highest-ever private equity (PE) buyout value in 2016. The region played host to 399 buyouts worth a combined US$102.2 billion – a new value record, despite a slight dip in deal volume.
The post-Brexit M&A meltdown hasn’t happened – quite the opposite. But longer-term prospects look more uncertain
A cursory glance at UK inbound deal value figures for 2016 would give the impression that the Brexit decision has hit the UK M&A market hard, even in the eight months since the shock referendum vote. Inbound M&A value into the UK fell by 55% from US$348.5 billion in 2015 to US$156.4 billion in 2016. However, first impressions can be deceptive.
Western European dealmaking peaked in 2016, with the highest volume ever and extremely strong interest from China
There may have been political and economic storm clouds hanging over the region, but those did not stop Western Europe becoming a beacon for M&A in 2016.
Stabilising oil and commodity prices and opportunistic deals, saw M&A in the EMU sector rise again in 2016. And 2017 could be even stronger
After a relative drought, dealmaking in the energy, mining and utilities (EMU) sector regained momentum in 2016. The picture is mixed across the sub-sectors, but upside potential is clear; with the exception of 2014, the sector’s volume and value are at their highest points since 2007. Global EMU activity reached US$615.9 billion in 2016, compared to US$569.2 billion one year earlier, according to White & Case’s M&A Explorer. In value terms, the sector was second only to technology, media and telecommunications (TMT).
This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2019 White & Case LLP