Blockbuster Deals Push Up Q3 Values
Contributed by Baker & McKenzie and Mergermarket, Partners of M&A Leadership Council
While political and macroeconomic uncertainty put a dampener on M&A volume in Q3, it hasn't prevented deal value from rocketing quarter-on-quarter.
Large multinational strategic buyers are maintaining a growth rationale that favors acquisitions, pushing up cross-border valuations. As a consequence, Baker & McKenzie’s Cross-Border M&A Index, which tracks quarterly deal activity using a baseline score of 100, climbed to 238, up 23% from Q2’s total of 194.
And, while Q3 2016 is 10% down on the total for the same period in 2015, it is above any quarter between 2009 and 2013.
Buyers announced 1,275 cross-border deals worth US$373bn, a 15% drop in volume but a 64% surge in value compared with the previous quarter. Cross-regional deals saw the greatest increase in value (82%) while intra-regional value had a still substantial 32% rise.
The drop in volume can be attributed to tightening US monetary policy, along with uncertainty caused by the Brexit vote and the US elections. However, in better news for mid-market M&A, global volumes traditionally drop around US elections but then pick up once there is more certainty around the direction of US policy.
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