Clifford Chance

Global M&A: Nearly half of deals in H1 2014 were cross-border – the highest proportion ever

The global M&A market has strengthened considerably during the first half of 2014, with a 30% increase by value compared to the previous half year. Cross-border M&A accounts for 46% of total activity, which is the highest proportion since records began[1].

Regionally, Europe enjoyed the biggest surge in M&A with a 48% uplift in activity buoyed by increased investment from North and South America, as well as a 36% rise in intra-European M&A. The US M&A market continues to recover with deals totalling US $729.3bn in the year to date. The only region to show a fall is Africa / Middle East where M&A dropped by a surprising 27%.

These findings feature in Clifford Chance's 'Insights into M&A Trends: Global Dynamics - July 2014 supplement', which contains H1 M&A data from Mergermarket and analysis from Clifford Chance and is an update to the 'Insights into M&A Trends 2014: Global Dynamics' report published at the start of the year.

Guy Norman, Global Head of Corporate at Clifford Chance said: "The global M&A market has seen some solid progress in the first half of the year, with the return of strategic deals and transformational M&A, some of which have been in the pipeline for years. We operate in an increasingly international deal environment, as evidenced by the highest ever proportion of cross-border M&A. As confidence returns to the boardroom, corporates are considering their long-term investment strategies, many of which may involve entering new markets.

Clifford Chance's report: 'Insights into M&A Trends: Global Dynamics - July 2014 supplement' identifies additional trends in global M&A in the year to date including:

• Healthcare uptick: while TMT remains the strongest sector in terms of deal value, the hottest sector currently is healthcare, which has seen its share of global deals rise to 16% from 7.5% in the previous half year. Four of the top ten global M&A deals by value have been healthcare deals.
• Float frenzy: IPO activity globally is up 60% compared to the same period last year. Notably private equity houses are also using the capital markets to secure exits, accounting for 33% of global IPOs.
• Real Estate returns: M&A in the Real Estate and Construction sector is up 1% on the previous half year, thanks to cash rich players who are now willing to invest. Activity is particularly evident in the number of global REIT IPOs to date.

Norman concludes: "Looking ahead, the deal pipeline is strong across all major regions and many sectors. Whilst this bodes well for M&A activity levels for the remainder of 2014 and beyond, the many geopolitical issues that are dominating the headlines may well affect corporate confidence, making it too early to extrapolate an M&A bull market from the current surge in activity ".

^[1] Since Mergermarket records began in 1998