Hesitancy Persists as M&A Markets Remain Volatile in Q2 2016
Contributed by Baker & McKenzie and Mergermarket, Partners of M&A Leadership Council
Headwinds that began to slow the progress of cross-border M&A in Q1 2016 continued to strengthen. Hesitancy persisted as global markets remained volatile: China’s slowdown showed no signs of abating; oil prices were still down despite recovering some ground; and political uncertainty grew globally. The UK held its EU referendum, presidential nomination campaigns occurred in the US, and a number of other parliamentary elections were held worldwide. As a consequence, Baker & McKenzie’s Cross-Border M&A Index, which tracks quarterly deal activity using a baseline score of 100, dropped to 176, down 33% from Q2 2015’s total of 263, the lowest Index result since Q3 2013.
Highlights from Q2 2016:
- Buyers announced 1,320 cross-border deals worth US$214bn this past quarter, a 4% drop in volume and a 45% drop in value compared to Q2 2015.
- Uncertainty in the lead up to the EU referendum hit UK M&A, with Q2 2016 outbound deal values down 82% and inbound deal values down by 89% on Q2 2015.
- Hesitation was also seen in US cross-border dealmaking, with volumes and values down 19% and 40% respectively, compared with Q2 2015.
- Chinese bidders provided the highlight, continuing to drive cross-border deal values in Q2 with 97 outbound deals worth US$40.7bn – 23% and 132% higher than the same period in 2015.
The report also features in-depth analysis of cross-border mining M&A, Middle East M&A (inbound and outbound activity), and merger control.
