2018 deal levels are good, but not quite record breaking…

At the end of H1 2018, global announced M&A deals stood at record levels, with a figure of USD 2.995bn surpassing the previous record for a six-month period, recorded in the first half of 2015, the year in which global M&A deals finally surpassed the levels seen some eight years earlier, in 2007.

2018 looked so promising back in late June/early July; there had been 32 mega deals (deals greater than USD 10bn) announced since the start of the year, generating the third-highest value of mega deals for a six-month period on record, after H1 2007 and H1 2015, respectively. However, in the second half of the year, the number of mega deals fell back to 17, the lowest figure recorded for a six-month period since H2 2012. In fact, the second half of 2018 saw the lowest value of announced deals globally for a six-month period in the last five years, with values reaching just below USD 2.1trn. The value of global announced deals finished the year at USD 5.3trn, and whilst this represents the third-highest annual value on record, it does feel a bit disappointing when you think about where activity levels were mid-way through the year.

So why did a year that promised so much finish relatively sedately?  The second half of 2018 has seen lower levels of corporate confidence, driven by, among other things, volatility in the global equity markets, increased trade war rhetoric between the US and China, and the increasingly messy situation around Brexit. When you combine all of these factors, it is really not surprising that corporate buyers have become a little more cautious and slowed down their pursuit of acquisition targets.

Filed under: mega deals, Global, M&A, deals