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First Half of 2017 Marked by Soaring Global M&A Values, Plummeting Volumes

Jorge Planet Mira, Head of Latin America, Merrill Corporation | August 01, 2017

Entering into the second-half of 2017, we look back on an H1 that saw global M&A deal values soar, but volumes plummet. Geopolitical uncertainty and currency volatility continue to make dealmakers cautious. However, the select deals that are being made are setting new records.

North American H1 deal value was the greatest of all regions, exceeding H12016 value by 5.7% with US$656.4bn, representing 43.9% of all global activity. The blockbuster acquisition of Whole Foods by Amazon for US$13.4bn caused ripples in both the media and e-commerce space with speculation as to whether this is to spark a trend of similar transactions.

Despite this, the top sector across all regions – continuing in strength from last month – was Energy, Mining & Utilities, with 662 deals worth US$267.9bn in H1. The Consumer sector came a close second in H1 with 894 deals worth US$253.1bn. Four of the top 10 deals of H1, including the largest transaction overall, British American Tobacco’s US$60.6bn acquisition of a 57.83% stake in Reynolds American, were from this sector.

Surprisingly, Latin American M&A activity gradually rebounded in H1 2017, ending the first half with nearly the same value and volume as in H1 2016. There were 257 deals worth US$25.2bn in H1 2017 – only three fewer deals and a 3.6% decline in value year-over-year.

Meanwhile, a new record was set in the Middle East and Africa (MEA) region, with the highest year-to date H1 figure on Mergermarket record (since 2001) of US$38.4bn. Despite the record value (up 12.7% from H1 2016) there were 55 deals fewer than in H1 2016 (228) – the lowest number of deals for the region since 2009 (128 deals).

Big Movers

There were some significant changes in deal sentiment and H1 figures from some notable geographies, mostly due to geopolitical factors. These include:

Deal making confidence is improving in the European market on the back of elections in France and the Netherlands. This comes despite Q2 2017 registering 191 fewer deals in comparison to Q1 2017.

Tightened outbound M&A control imposed by Chinese regulators dampened the deal flow from China, with 28 fewer deals into Europe in the first half of 2017 and value down by 67.4% to US$24.4bn across 58 deals.

In the first half of 2017, Japan’s M&A activity reached its lowest year-to-date figure in a decade (US$14.4bn), accounting for a value drop of 53.4% compared to H1 2016 (US$30.9bn). While value was down, volume of deals remained strong.

For a closer look at these data points and more, read the Monthly M&A Insider, which explores the global M&A market with respect to the numbers, movements and trends, as well as revealing the top financial and legal advisors – globally and across six regions (North America, Central and South America, Europe, Middle East and Africa, Asia-Pacific and Japan.

Download the Monthly M&A Insider

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