Global M&A Activity Predicted to Increase in First Half of 2017

The Intralinks Deal Flow Predictor, an indicator of future mergers and acquisitions (M&A) announcements, with a proven track record for accuracy, forecasts a six percent increase in the total number of M&A deals announced globally in 1H 2017 compared to 1H 2016, setting a new record for annual first half global announced deal count.

“The fact that the rate of growth in early-stage M&A activity in Q4 2016 remained steady despite the (unexpected) victory of Donald Trump in the US presidential election and the (expected) decision of the US Federal Reserve to increase the target range for the federal funds rate by ¼ of a percentage point, suggests that dealmaking confidence remains high. The forces that have been powering M&A activity over the past three years – namely a global environment of low inflation, below-trend economic growth and ultra-low interest rates – remain in place today,” said Matt Porzio, Vice President of M&A Strategy and Product Marketing at Intralinks.

Year-over-year (YoY) growth in early-stage M&A activity in Q4 2016, which is an indicator of M&A announcements in Q2 2017, grew by seven percent globally. This increase in activity was driven by increased numbers of early-stage transactions in three out of the four global regions: Asia Pacific (APAC, up 44 percent), Latin America (LATAM, up 11 percent) and Europe, the Middle East and Africa (EMEA, up 9 percent). In North America (NA) early-stage M&A activity declined by 5 percent.

Regional M&A predictions according to the Intralinks Deal Flow Predictor include:

  1. In APAC, M&A announcements in Q2 2017 will increase YoY, with the strongest levels of growth coming from India, Southeast Asia and Japan. The top three APAC sectors for YoY growth in Q2 2017 M&A announcements will be Financials, Consumer & Retail and Healthcare.
  2. In EMEA, M&A announcements in Q2 2017 will increase YoY, with the strongest levels of growth coming from France, Spain, Germany and Eastern Europe. The top three EMEA sectors for YoY growth in Q2 2017 M&A announcements will be Consumer & Retail, TMT (Technology, Media and Telecoms) and Energy & Power.
  3. In LATAM, M&A announcements in Q2 2017 will increase YoY, with the strongest levels of growth coming from Argentina and Mexico, with Brazil showing flat or slightly declining M&A activity. The LATAM sectors with the strongest YoY growth in Q2 2017 M&A announcements will be Healthcare and Real Estate.
  4. In NA, the number of M&A announcements in Q2 2017 will decrease YoY. The NA sectors leading the decline in announcements in Q2 2017 will be Consumer & Retail, Industrials and Energy & Power. The Materials, Financials and Healthcare sectors will, however, show increasing announcements in Q2 2017.