Global merger and acquisition deals fell to USD 2.2 tillion during January-September period, a decline of 20 per cent over last year amid political uncertainty and increased regulation, says a report.
According to global deal tracking firm Mergermarket’s Q1-Q3 global and regional M&A report, there were 12,283 deals worth USD 2.2 tillion in the January-September period, while in the same period last year there were 13,263 transactions worth USD 2.8 tillion.
“Global M&A deal making in 2016 has not been able to achieve the dizzying heights reached in 2015, with political uncertainty, increased regulation and decreased confidence on board all weighing down on activity,” the report said.
Although M&A activity is down compared to the two preceding years, the April-June and July-September quarter have witnessed rise in deal values.
Sector-wise, industrials & chemicals has been the most targeted sector globally, with 2,313 deals worth USD 416.8 billion, representing a 41.1 per cent value increase over 2015.
A record seven mega-deals worth USD 183.6 billion pushed the sector value to reach a post-crisis high.
According to Mergermarket intelligence, a string of mega-mergers in the sector are set to create myriad M&A opportunities for private equity buyers and sellers.
Chinese buyers remained a key driver of M&A globally, with 201 deals worth USD 141.2 billion so far this year. Chinese firms have targeted firms outside the Asia-Pacific region and has overtaken all annual deal values and volumes on Mergermarket record since 2001.
Despite Brexit concerns, the immediate drop in sterling following the referendum vote caused “opportunistic” dealmakers to engage in a bargain hunt for UK assets.
This was seen in Japan-based Softbank’s USD 30.2 billion acquisition of UK-based Tech firm ARM holdings – the highest valued deal targeting a UK company this year.
As a result of a few big-ticket deals, July-September inbound activity into the UK stood at USD 49.3 billion by way of 121 deals, while in the preceding quarter 159 transactions worth USD 12.9 billion were announced, it said.