The activity on the global M&A market remained high enough in the first half of 2017, despite the strengthening of protectionist sentiment and regulatory intervention. Forecasts for the rest of the year are also optimistic: market participants who make direct investments have a record amount of funds, which leads to an increase in the number of transactions. . This is stated in the study of the international audit firm EY “Global Capital Confidence Barometer”.
The total value of global deals in the first half of 2017 amounted to USD 1.4 trillion − a soft decline of 4% compared to the same period of last year. The decrease in the volume of transactions can be explained by the reduction of the number of mega-agreements worth over USD 10 billion. Deals that range from USD 1 billion to USD 10 billion became the main driving force of M&A around the world. Their volume remained at one level with the same period in 2016. Also it should be noted that transactions increased by 4% from 17 642 transactions in the first half of 2016 to 18 363 transactions in the same period of 2017.
Interestingly, the number of managers avoiding conclusions of deals due to concerns about regulatory or anti-monopoly issues has almost tripled compared to 2016.
Steve Krouskos, EY Global vice president of transaction advisory services, said: “Geopolitical changes and increased protectionism have led to additional complications in the M&A market, but companies overcome these barriers. Growth remains a top priority, and M&A deals are the way to achieve it. However, given the volatility of the environment, participants in the deals need to deepen the understanding of the principles of inclusive development in order to provide support to stakeholders”.
Available and cheap financing, good financial performances, record levels of direct investments and an increase in the number of planned transactions are all the predictors of conclusion of large deals in the near future.