Mergers and acquisitions
Global M&A topped US$3t in the first three quarters of 2018 – the first time since the global financial crisis
Global M&A topped US$3t in the first three quarters of 2018, but slowing deal activity in the third quarter points to a softening of dealmaking in the near term. In 3Q18, US$770b worth of deals were recorded, with only 5 megadeals announced compared with 31 in 1H18, which led to a drop in deal value growth.
Despite the uncertainty around Brexit, the UK is the top destination for cross-border deals, with deal value increasing by 250% year on year (YOY) to reach US$216b in 2018.
According to the EY 19th Global Capital Confidence Barometer (CCB), confidence in the M&A market remains near record highs, supported by market factors such as a positive economic environment and strong corporate earnings. However, rising geopolitical and regulatory concerns are perceived as a growing impediment.
With rising external uncertainties, executives are increasing the frequency of their own internal portfolio analysis, as observed by the CCB. The focus of these portfolio reviews is to identify assets at risk to be divested. Recycling capital through divestiture may likely underpin deal flow in the next 12 to 24 months.