The Intralinks Deal Flow Predictor forecasts that the number of worldwide announced M&A deals in H1 2018 is expected to increase by up to 10 per cent year-over-year (YOY), compared to H1 2017.
Over the next six months, the strongest growth in worldwide deal announcements is predicted to come from the Consumer & Retail, Industrials and Healthcare sectors.
“Despite recent volatility in financial markets, the dealmaking environment continues to be supported by a strong pickup in global economic growth, low inflation, low interest rates and a plentiful supply of corporate and private equity bidders,” says Philip Whitchelo, Intralinks’ Vice President for Strategic Business Development. “The recent correction in equity markets may also result in valuations of M&A targets becoming more attractive.”
The Intralinks Deal Flow Predictor forecasts the number of future M&A deal announcements by tracking early-stage M&A activity – new sell side M&A transactions across the world that are in preparation or have reached the due diligence stage. These early-stage deals are, on average, six months away from their public announcement.
In Europe, the Middle East and Africa (EMEA), the number of announced M&A deals in H1 2018 is predicted to increase by around 3 per cent YOY, with a range between -2 per cent and 8 per cent. Over the next six months, the strongest growth in EMEA deal announcements is predicted to come from the Middle East & Africa, Eastern Europe and Northern Europe, and from the Healthcare, Materials and Consumer & Retail sectors. Intralinks is predicting a recovery in French deal announcements in H1 2018, as early-stage M&A activity in that country has risen by 7 per cent over the past six months. Germany, however, looks set for further disappointment in H1 2018, as early-stage M&A activity has fallen by 18 per cent over the past six months, suggesting that the number of announced deals in H1 2018 will be less than in the same period last year. The UK looks set for modest growth in H1 2018, with early-stage M&A activity having risen by 4 per cent over the past six months.
In Asia Pacific (APAC), the number of announced M&A deals in H1 2018 is predicted to increase by around 14 per cent YOY, with a range between 7 per cent and 21 per cent. Over the next six months, the strongest growth in APAC deal announcements is predicted to come from North Asia (China, Hong Kong and South Korea), India, Southeast Asia and Australia, and from the Energy & Power, Industrials and Materials sectors. All APAC regions, except Japan, are showing double-digit increases in their volumes of early-stage M&A activity.
In Latin America (LATAM), the number of announced M&A deals in H1 2018 is predicted to fall by around 4 per cent YOY, with a range between -16 per cent and 9 per cent. Over the next six months, the strongest growth in LATAM deal announcements is predicted to come from Peru, Mexico and Brazil, and from the Financials, Healthcare and Technology, Media & Telecoms (TMT) sectors.
In North America (NA), the number of announced M&A deals in H1 2018 is predicted to be around 5 per cent lower YOY, with a range between -14 per cent and 3 per cent, due to an exceptionally strong H1 2017 comparison period. Over the next six months, the strongest growth in NA deal announcements is predicted to come from the Industrials, Healthcare and TMT sectors. Supportive fiscal conditions and strong business and consumer confidence are all contributing to the current buoyant NA M&A market. A sweeping overhaul of US corporate and personal taxation, passed by the US Congress in December, is also expected to stimulate growth and M&A activity.
