Worldwide M&A Activity Set to Push Higher over the Next Six Months, but Imbalances Remain
Asia Pacific region predicted to lead growth in worldwide deal announcements over the next six months
NEW YORK, November 13, 2018 – Intralinks®, a leading global virtual data room (VDR) provider, announced today that that the number of worldwide announced mergers and acquisitions (M&A) deals over the next six months is expected to increase by around 6 percent year-over-year (YOY) compared to the same period in 2018. The prediction appears in the latest Intralinks Deal Flow Predictor, an indicator of future M&A announcements with a proven track record for accuracy.
However, while the short-term outlook for M&A activity remains positive, systemic imbalances that have underpinned the market’s recent growth and warning signs of market stress suggest that the M&A market may be due a correction.
“Structurally, YOY growth in M&A activity in the first nine months of 2018 has exclusively been driven by the Asia Pacific region, where the number of announced deals increased by 6 percent compared to a 7 percent decline in the rest of the world,” said Philip Whitchelo, Intralinks’ Vice President of Strategic Business & Corporate Development. “There are also warning signs of market stress such as rising U.S. interest rates, declining global equity markets, overstretched M&A valuation levels and increasing protectionism against cross-border M&A deals and global trade flows. Taken together, these suggest that the current M&A up-cycle may be nearing its peak.”
The Intralinks Deal Flow Predictor forecasts the number of future M&A announcements by tracking early-stage M&A activity – new sell-side M&A transactions that are in preparation or have begun their due diligence stage. These deals are, on average, six months away from their public announcement.
In Asia Pacific (APAC), the number of announced M&A deals is predicted to increase by around 14 percent YOY over the next six months, within a range of 7 percent to 20 percent, led by the TMT, Energy and Power, and Materials sectors. Within APAC, all regions are showing double-digit increases in their volumes of early-stage M&A activity.
In Europe, the Middle East and Africa (EMEA), the number of announced M&A deals is predicted to be flat YOY over the next six months, within a range of -6 percent to 7 percent, led by the Consumer & Retail, Industrials and Real Estate sectors. Among the five largest European economies, over the next six months, France, Italy and the UK are expected to show the highest growth in M&A announcements, whereas levels of M&A announcements are expected to be flat in Germany and are expected to decline in Spain.
In Latin America (LATAM), the number of announced M&A deals is predicted to decrease by around 5 percent YOY over the next six months, within a range of -17 percent to 6 percent. The Real Estate sector is predicted to be the only one to see growth in the number of LATAM M&A announcements over the next six months. Among the largest LATAM economies, Argentina is predicted to show the highest increase in M&A announcements over the next six months, whereas levels of M&A announcements are expected to decline in Brazil and to be flat in Mexico.
In North America (NA), the number of announced M&A deals is predicted to increase by around 3 percent YOY over the next six months, within a range of -6 percent to 12 percent, led by the Real Estate, Industrial, and Materials sectors.
This issue of the Intralinks Deal Flow Predictor also includes a spotlight feature on the prospects for blockchain applications in M&A and an interview with a leading M&A practitioner on doing deals with family-owned businesses.
Follow this link to learn more about the Intralinks Deal Flow Predictor.
Intralinks is a leading financial technology provider for the global banking, deal making and capital markets communities. As pioneers of the virtual data room, Intralinks enables and secures the flow of information facilitating strategic initiatives such as mergers and acquisitions, capital raising and investor reporting. In its 22-year history Intralinks has earned the trust and business of more than 99 percent of the Fortune 1000 and has executed over US$34.7 trillion worth of financial transactions on its platform. For more information, visit www.intralinks.com.
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