The Intralinks Deal Flow Predictor, an indicator of future mergers and acquisitions (M&A) announcements, 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 APAC region, with 44 percent year-over-year (YoY) growth in early-stage M&A activity in Q4 2016, is the top performing region for early-stage M&A activity, and is set to contribute heavily to 1H 2017’s expected record deal count, with strong performances from India, Southeast Asia, Australia and Japan.
This level of YoY growth in early-stage M&A activity is also the highest in APAC for almost five years. In terms of sectors, Financials, Consumer & Retail and Healthcare will fuel the growth in announced APAC M&A deals in Q2 2017.
“While almost all parts of APAC showed double-digit YoY growth, India once again proved to be the fastest growing country in the region, a position it has held for three consecutive quarters, with YoY growth of 100 percent,” said Philip Whitchelo, VP Strategy and Product Marketing at Intralinks.
Whitchelo added, “Other parts of APAC contributing to the significant growth that we are seeing in early-stage M&A activity include Southeast Asia which is up 49 percent, Australia up 47 percent and Japan up 33 percent.”
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.
“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,” says Matt Porzio, Vice President of M&A Strategy and Product Marketing at Intralinks.
“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.”