Thomson Reuters recently released a report on global mergers and acquisitions in the first nine months of 2018. According to the report, global M&A volume fell 32% in Q3 2018 compared to Q2 2018. The number of deals – 35,543 – in the first nine months of 2018 dropped 9% compared to the same period of 2017. Overall, however, global M&A activity has remained strong in 2018: in the first nine months of 2018, M&A activity reached a new record of nearly US$3.3 trillion. This represents a 37% increase compared to the same period of 2017.
Increase in mega deals and cross-border M&A
More than 100 “mega deals” – deals worth more than US$5 billion – accounted for $1.4 trillion, or approximately 43%, of the value of total announced M&A deals. This is more than twice the amount of mega deals seen in the same period last year.
Cross-border M&A, which totalled US$1.3 trillion (accounting for roughly 41% of M&A activity in the first 9 months of 2018), experienced its strongest first three quarters since 2007 (in which cross-border activity accounted for 44% of total M&A activity during the same period).
United States and Europe saw the largest increases in M&A activity
According to Thomson Reuters’ figures, the biggest increases in M&A activity occurred in the United States (US$1.3 trillion, up 50% from last year) and Europe (US$941.2 billion, an increase of 64% from 2017). European deals accounted for 29% of overall M&A activity, the highest percentage since the first nine months of 2012.
Announced Canadian M&A activity totalled US$201.7 billion in transaction value, representing a 19.3% increase compared to the first nine months of 2017. Announced Canadian M&A activity was, however, down 5.3% from the previous quarter. Completed Canadian deals are down 20.6% compared to the same period last year.
Energy and power sector leads the way
In terms of industry sectors, energy and power, healthcare, and technology are leading the way in 2018. M&A activity in the energy and power sector totaled US$548.1 billion, an increase of 56% compared to 2017 levels. Technology and Healthcare M&A each accounted for 11% of overall M&A activity by volume.
The author would like to thank Scott Thorner, articling student, for his assistance in preparing this legal update.
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