With transaction activity globally on track to have a record 12 months, cross-border M&A deals are also enjoying a strong year. To shed some light on this trend, today we launched the inaugural edition of our quarterly Cross-Border M&A Index.
The highlight figures above reveal some notable trends. Cross border activity in Q3 2015 was up 10 percent by deal value on the same period last year to $375 billion with 1,230 deals. This growth is despite a 16 percent decrease in transaction volume, and partially the result of a 10 percent increase in the value of mega deals worth more than $5 billion.
Our Index analyzes the number, size and complexity of cross-border deals, and on the back of this growth currently stands at 231 for Q3, well above the lowest quarterly figure of 119 for Q1 2010. While this quarter’s reading is down from a peak in Q2 2014 of 285, as a reflection of the strong appetite for cross-border deal making, the Index has remained above 200 since Q1 2014.
“Improving economic indicators in the U.S., easing concerns in the EU and emerging opportunities in Asia Pacific should continue to spur cross-border activity, particularly so-called ‘mega deals’,” says Michael DeFranco, Global Head of M&A at Baker & McKenzie.
“We have seen a step-change philosophy in our clients, who are increasingly comfortable pursuing mid-market to mega deals implicating multiple jurisdictions as they look to develop sustainable competitive differentiators cross-geography. While near-term pending actions by financial regulators and growth uncertainty overhangs in emerging markets may stall activity, we remain optimistic in the medium-term that cross-border deals will continue at their current robust levels.”
The full report can be found at www.bakermckenzie.com/crossbordermaindex. In addition to further global and regional trends, it also includes spotlights on developments in the U.S., the healthcare sector and managing risks in cross-border deals.