Booming M&A Activity Across Sectors Continues Puts Global Deal Making on Track to Reach an All-Time Record in 2015
M&A activity in the third quarter of 2015 saw deal making achieve more than $1tn. This, with a combined value of mergers and acquisition over the past 9 months shows a 32% increase (compared to last year’s period) to £3.17tn. This puts global deal making on track to reach an all-time record in 2015, suggesting there is no better time to sell.
The data, from Thomson Reuters, shows that deals have been struck across a range of industries with no single sector accounting for more than 15% of the $3.17tn in announced deals so far in 2015.
Record Activity in Consecutive Months
Elevated share prices and increased levels of corporate cash have generated larger, international deals, and it is because of this activity Q3 of 2015 marked the first time in 15 years that mergers and acquisitions have topped $1tn in two consecutive quarters.
While activity has been strongest in the US and China, rising 48 and 58% respectively, deal making in Europe has reached its highest level since 2008, seeing a rise of 6% within the last 12 months to $671bn. As a result, the number of international deals has increased; a total of $428bn worth of M&A activity came from companies headquartered in different countries in the third quarter, which accounted for 42 per cent of total activity in this period.
Although the third quarter has not surpassed the landmark figures seen in the second quarter, we can clearly see the diversity of sectors within M&A activity so far this year, including the pharma, oil, energy, engineering and insurance sectors to name but a few.
No single sector has dominated activity. However, the energy and healthcare industries combined accounted for nearly 30% of deal making so far in 2015, making these sectors the leaders for M&A activity. In particular, Energy Transfer Equity’s acquisition of Williams, a deal worth $38bn, dramatically increased M&A deal making in the energy sector, worth $475bn so far. On top of this, M&A activity in the healthcare industry has continued to grow, rising 14% from last year taking the value of deals to $460bn.
Trajectories for 2016
Forecasters predict that similar figures can be expected in the fourth and final quarter of 2015, extending into 2016. This includes a continued increase in the levels of international activity, particularly between the US and Europe thanks to destinations with relatively low corporate tax rates, a stable economic backdrop and a rising number of attractive takeover opportunities.
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