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Mergers and acquisitions reached $3.1 trillion, Russia's very strong

Staff Writer |
Global merger and acquisition activity has soared to $3.1 trillion so far this year, its third highest since 2007, even as the deal value saw over 22% decline last year, says a report.

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According to global deal tracking firm Mergermarket, despite a series of “political shockwaves”, global M&A activity till date amounted to $3.1 trillion through 16,194 deals, PTI reported.

The M&A deal tally so far this year registered a 22% decline in value terms and 10% fall in number of transactions over last year. Last year, the global deal tally stood at $3.9 trillion.

However, global M&A activity till date of $3.1 trillion managed to reach its third highest deal value since 2007, when transactions worth $3.7 trillion were announced.

The report further noted that October 2016 marked the peak of yearly M&A activity, with 1,362 deals worth $454.3 billion representing the highest monthly deal value since May 2007 when $546.7 billion transaction were announced.

The year 2016 witnessed just 38 big ticket transactions (worth more than $10 billion) aggregating $911.5 billion. In the corresponding period last year, there were 57 such deals worth $1.5 trillion.

Going forward, “the outlook for 2017 remains uncertain”, Mergermarket said, adding that “with Brexit negotiations, the nature of Trump’s presidency as well as the French and German elections, all under question’’.

Sector wise, energy, utility and mining attracted deals worth $582.8 billion by way of 1,351 deals, followed by industrials and chemicals ($498.5 billion, 3,056 deals) and technology ($401.4 billion, 2,115 deals).

The report further noted that Chinese dealmakers engaged in 242 deals worth $171 billion outside of Asia, 3.5 times higher than 2015’s previous record value.

U.S. deal-making accelerated towards the end of the year, with a flurry of mega deals (AT&T/Time Warner, Level 3/Century Link, Energy Transfer/Sunuco) bumping up the deal value, it added.

Investment banking deal volumes in Russia rose almost 50% in 2016, with domestic advisors leading the charge, but continued sanctions and the economic contraction mean the industry remained a shadow of its former self.

According to Thomson Reuters data up to December 14, equity capital market volumes in Russia have more than doubled to $3.1 billion this year, while capital raisings in debt markets rose by a quarter and the value of takeover deals involving Russian targets was up 65% at $36.5 billion. But the combined total is down by 50% on three years ago.

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