A decline in global M&A activity highlights uncertainty around U.S. tax reform and deregulation agenda, offset by a surge in European deals. Thomson Reuters Deals Intelligence brings you the latest deals data.
Worldwide M&A activity totaled US$1.6 trillion during the first half of 2017, a 2% increase compared to the first half of 2016. During the first half, 275 deals with a value greater than US$1 billion were announced, totaling US$946.9 billion, flat compared to last year’s first half.
By number, deals greater than US$1 billion increased 14% compared to a year ago. Overall, 22,752 worldwide deals were announced during the first half of 2017, a 4% decrease compared to last year’s first half.
As we will discuss in our forthcoming #DealTrends webcast on 25 July — Navigating Dealmaking in 2017: The Politics and Risks of a Changing Landscape — uncertainty around the U.S. policy agenda has reduced the appetite for deals.
To help understand how the landscape is changing, Thomson Reuters Deals Intelligence has taken a closer look at the latest data and put it into context.
Key facts and figures
- Worldwide M&A activity totaled US$1.6 trillion during the first half of 2017, a 2 percent increase compared with the first half of 2016.
- During the first half, 275 deals with a value greater than US$1 billion were announced, totaling US$946.9 billion — flat compared to last year’s first half.
- By number, deals greater than US$1 billion increased 14 percent compared to a year ago.
- Overall, 22,752 worldwide deals were announced during the first half of 2017, a 4 percent decrease compared with last year’s first half.
European M&A activity
Amid signs of a recovery in European confidence, M&A in the region for Q2 rose 45 percent year-on-year to US$234 billion.
M&A activity for European targets totaled US$449.0 billion during the first half of 2017, an increase of 33 percent compared with the level of activity seen during 2016.
Speaking to Reuters, Hernan Cristerna, global M&A co-head at JPMorgan Chase, said: “The EU recovery is happening and has made companies more attractive even if there are increased regulatory hurdles.”
In the second quarter, Italian toll road operator Atlantia SpA made a US$18.6 billion offer for Abertis Infraestructuras SA, while chemicals companies Huntsman Corp and Switzerland’s Clariant AG agreed a US$14 billion merger.
Cross-border M&A at 10-year high
Cross-border M&A activity totaled US$630.9 billion during the first half of 2017, powered by increased levels of outbound M&A from acquirers based in the United States and inbound M&A for European assets.
This accounted for 40 percent of overall M&A volume and the highest first half tally since 2007.
Deal-making in the Energy & Power sector totaled US$240.6 billion during the first half of 2017, an increase of 29 percent compared to 2016 levels, while Real Estate M&A increased 8% by value and 7 percent by number of deals.
Industrials deal-making accounted for 12 percent of overall M&A activity, while Healthcare M&A accounted for 10 percent.
Materials and Technology M&A registered the steepest year-over-year declines, down 46 percent and 34 percent, respectively.
Strongest First Half of the Year for IB Fees since 2007
Meanwhile, fees for global Investment Banking services, from M&A advisory to capital markets underwriting, totaled US$50.1 billion during the first half of 2017, a 16.6% increase over last year at this time and the strongest fisrt half of the year for IB fees since 2007. Fees in the Americas totaled US$25.8 billion, up 16.3% compared to a year ago while fees in Europe increased 22.3% and fees in Japan increased 59.6%.
Fees in Asia Pacific increased 2.6% compared to a year ago, while fees in Middle East/Africa decreased 0.6% compared to first half 2016 levels.
JP Morgan topped the global investment banking league table during the first half of 2017 with US$3.4 billion in fees, or 6.74% of overall wallet-share. Goldman Sachs booked US$2.9 billion in fees during the first half of 2017 for second place, while Bank of America Merrill Lynch remained in third place from a year ago.
The composition of the top ten banks remained largely unchanged, with Citi and RBC Capital Markets moving up one spot to fourth and ninth, respectively.
Within the top 10, Goldman Sachs, Morgan Stanley and Wells Fargo were the only firms to see wallet share increases during the first half.
Trump’s first 100 days
During the first 100 days of Donald Trump’s presidency, deal-makers proved to be opportunistic and resilient.
- Between the election and the end of the first 100 days, the Dow Jones Industrial Average was up 12 percent, the largest gain for any U.S. president since Ronald Reagan.
- US$55 billion in capital was raised in the United States during Trump’s first 100 days, trailing George W. Bush (in real dollar terms).
- 13 M&A deals over US$5 billion were announced during Trump’s 100 days, compared with 12 for Barack Obama and 21 for George W Bush
- Worldwide cross-border M&A was the highest recorded in these presidents’ first 100 days, with U.S. inbound and outbound M&A hitting a record.
But high stock market valuations, uncertainty around the policy agenda and tax reform, have reduced the appetite for major deals.
With US$583.9 billion in announced deals during the half, United States M&A fell 16 percent compared with a year ago.
Emerging markets decline
The total value of announced M&A activity in emerging markets reached US$458 billion during the first half of 2017, a 14.7 percent decrease from totals reached during the first half of 2016.
The number of M&A transactions in emerging markets totaled 7,378, a 13.6 percent decrease from the total number of deals in the first half of 2016.
Chinese involvement drove M&A activity in emerging markets, with 2,956 transactions worth US$291 billion, far outpacing Brazilian involvement, which generated the next highest volume, with 273 deals worth US$36.2 billion.
However, China’s outbound M&A volumes nearly halved in the first six months of 2017 following Beijing’s crackdown on capital outflows.
With its new scrutiny of acquisitive groups, including Anbang and HNA, Asian deal-flow is set to dampen further.
The total value of announced M&A activity in Asia Pacific fell 15 percent in the first half of this year to $458.4 billion from the year-ago period, the data showed.
China was the top nation for both inbound and outbound deals in Asia Pacific for the half-year, attracting US$28.5 billion worth of inbound deals.
Best in class M&A insight
Join Thomson Reuters Deals Intelligence on 25 July to find out the highs and lows of deal making so far this year, how and why the landscape is changing, the key data and exclusive insights.
Our speakers will explore topics including the U.S. deal-making landscape, the impact of political uncertainty in Europe, as well as the slowdown in China’s M&A.
On 12 June 2017, we hosted our inaugural Reuters Global M&A Summit, an exclusive event that brought together senior investment bankers, M&A lawyers, international investors and corporate executives.