Corporate Financing Analysis - Global M&A Rally To Sustain Across 2017 - 03 APR 2017

If the first quarter is anything to go by, then we are set for a stellar year of activity in the global M&A arena across 2017. Announced deal activity has shot out of the blocks this year due to three key trends: the more readily available access to deal financing supported by high levels of unworked cash, the return to the engine room for the US and UK markets following a year of political uncertainty that weighed on deal sentiment on both sides of the Atlantic in 2016 and, lastly, the bull market oil price spurring a return to acquisitive growth in the global Oil & Gas sector - which we believe will sustain the level of activity across the remainder of the year.

The Story So Far

According to data provider Dealogic, activity over the first three months of the year has been at its strongest since the onset of the global financial crisis. Global announced dealmaking has reached a level of USD705.0bn, which represents the fourth consecutive y-o-y increase in activity, a return to 'animal spirits' which has seen activity levels increase by as much as 40% (in terms of deal value) from a ten-year low of USD502.2bn in announced activity recorded in the 2012 y-t-d period. Furthermore, not since the eve of the crisis in 2007, when takeover activity was rife (activity totalled USD903.5bn), has the combined value of deals crossed over the USD700bn line. A sure sign of investor confidence in the broader global economy and acquisitive growth-hungry boardroom optimism towards securing financing for deals in building is the return of larger deals. In the first quarter of this year we have seen as many as 125 merger deals valued at USD1bn or more (worth a combined USD454.9bn) announced around the globe. This haul has included a high volume of deals greater than USD10bn (worth a combined USD167.2bn).

Cash Remains King
Global M&A Deals Financed With Cash, USDmn
Source: Zephyr, a Bureau van Dijk product

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