Record-Setting Cross-Border Deal Activity in 2015

Index

With corporate dealmaking activity at record highs, those companies are also executing record levels of cross-border transactions, according to Baker & McKenzie’s latest edition of its quarterly Cross-Border M&A Index.

Overall M&A in 2015 reached $4.28 trillion, of which 39% were cross-border in nature at $1.66 trillion on 5,441 deals, up 17% on value over the prior year and enough to set a new post-crisis record. Full year cross-border deals included $1.06 trillion in cross-regional deals, up 7%, and $595.0 billion in intra-regional deals, up 40%.

Cross border activity in Q4 2015 was up a substantial 61% by deal value on the same period last year to $597.4 billion with 1,224 deals, including a record $390.1 billion in cross-regional and $207.3 billion in intra-regional deals. Reflecting the recent boom in cross-border deals, the last three quarters of 2015 all exceed every quarter by value since 2009 but for Q2 2014. By contrast domestic M&A deals rose 41% in 2015 to $2.62 trillion and rose 47% in Q4 to $780.4 billion.

The Index, which analyses the number, size and complexity of cross border deals, stands at 331 for Q4, well ahead of the prior quarter’s 254. The Index also surged past the prior record set in Q2 2014 at 278, as it has crossed 300 for the first time ever in its six year history. The Index has remained above 200 since Q1 2014.

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Mike DeFranco

“As political and economic barriers between countries are lowered, we expect our clients to take advantage of strategic opportunities abroad via cross-border M&A, and 2015 showed that indeed this is already taking place,” said Michael DeFranco, Global Head of M&A at Baker & McKenzie.

“Looking ahead, 2016 has already begun with shaky markets on the back of concerns from the World Bank and unease in China. While this macroeconomic uncertainty may dampen deal activity, the window of opportunity remains open for executing more ambitious corporate strategies, particularly cross-border deals. As such, we expect that more and more deals in the coming years will implicate multiple jurisdictions,” Mr. DeFranco said.

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