Companies worldwide have agreed deals worth $2.37trn so far this year, says the Financial Times – a 22% fall from last year’s record-breaking mergers and acquisitions (M&A) activity.
This isn’t just a case of volatile markets denting confidence, although Britain’s share of global deal-making activity has slipped to a 20-year low thanks to nervousness over Brexit.
Globally, the value of withdrawn bids has reached a record $700bn, as several were overambitious and blocked by regulators. This has made firms more cautious as well as reducing the overall volume of deals.
Look at the number of deals being announced rather than their value, however, and the quarterly pace is around average for the past three years. And with growth lacklustre, firms are going to look to M&A to drive growth and returns, Deutsche Bank’s Alasdair Warren told the FT.