Dealmaking will be a constant source of headlines in the next year but the themes will vary
Many of the trends apparent in 2019 will continue to drive deal markets in the next 12 months. Prominent will be an increasing number of hostile and competitive bids. Private capital funds increasingly flushed with capital will continue to fuel more competitive tension.
The expectations for an increase in cross-border and cross-sector deals is a clear indication that companies will continue to transform their portfolios to build optionality and resilience in their operations.
One area where executives are split is on the continuation of the near-record levels of megadeals (US$10b+). These have been a hallmark of 2019, but executives are split evenly on the continuation of this trend. Megadeals are notoriously difficult to predict, so it will be interesting to see which side is correct.
Western Europe remains the investment focus for many cross-border mergers and acquisitions
Relatively lower valuations and an abundance of high-quality assets make Europe a desirable marketplace for acquisitions. While Europe continues to be the focus for cross-border dealmaking in the near term, the strengthening flows between Europe and Asia, as opposed to the usual Europe-North America axis, is a new trend in global M&A.
With uncertainties about market access and regulatory regimes prominent, companies are looking at the longer-term opportunities. Companies in Asia want to acquire European intellectual property. Companies in Europe want to tap into the more favorable growth and demographics in Asia.