The world is in for another record M&A year, despite political volatility such as Britain choosing to leave the European Union and the United States electing Donald Trump president.
In the latest edition of the Intralinks Deal flow Predictor, Intralinks forecasts that the number of announced M&A deals in FY 2016 will increase by 3 percent, potentially making it the new peak year for number of global deal announcements, surpassing even the heady heights of 2007.
The company is also predicting an increase of 5 percent YoY in Q1 2017 as compared to Q1 2016, suggesting no slowdown in M&A activity as we enter the new year.
Market trends and regional variations
While there is an uptick in activity globally, there are regional variations that may cause concern for some dealmakers. In Europe, the Middle East & Africa (EMEA), Asia-Pacific (APAC) and North America (NA), early-stage M&A activity is up 13, 9 and 5 percent respectively, whereas in Latin America (LATAM) early-stage M&A activity declined by 12 percent.
In Asia, M&A growth is led by India, a country posting double-digit growth in the previous three quarters – not surprising, given it is predicted by the International Monetary Fund (IMF) to be the fastest-growing economy of any country globally.
Australia and Japan posted declining early-stage activity levels, with Australia still struggling to find an alternative to the Metals and Mining sector and the continuing failure of Japan’s Abenomics to stimulate economic growth.
Globally, the strongest sectors for early-stage M&A activity are Real Estate, Energy & Power, Technology, Media, Telecommunications (TMT), all of which increased by double-digit percentages.