H1 2016 produces disappointing but not surprising levels of global dealmaking

It was always going to be a big ask for global deal making levels to get anywhere close to what was recorded in H1 2015. There were simply too many imponderables; Brexit; ongoing geopolitical issues and an apparent slowdown in economic growth in some of the world’s biggest economies like China. However the decrease seen between H1 2015 and H1 2016 of just over 33 per cent in global announced deal values has I’m sure been more disappointing than was anticipated. H1’s figure is the lowest since H1 2013, and very often the key to whether a year turns out to be a good year or a vintage year are the “mega deals”. In the first six months of 2016, 13 deals with a value greater than USD 10bn were announced, more comparable with the 11 announced in the first half of 2013, but definitely not comparable with the 27 mega deals announced in the first six months of 2015. M&A deal activity is closely linked to confidence and financial market stability and vice-versa, but one could surely argue that this is a virtuous circle.

I’m a big believer that whenever possible one should always try to see the glass as half full rather than half empty, and that is where I believe we find ourselves at the moment. Brexit has happened, the geo-political issues we face globally do not have a quick fix, the impact of these two issues will no doubt influence economic growth, but as I have said before M&A practitioners are intelligent and resilient and are more than capable of finding ways to make deals happen, even in challenging situations.

Filed under: H1 2016, dealmaking, global, M&A, 2016