Navigating change: H1 in review
First-half activity remains on par with 2016, as strong fundamentals continue to drive M&A
US M&A defies market uncertainty
An impressive first half of the year for US dealmaking reflects M&A's enduring value in an uncertain market
After a very strong 2017—when M&A in the US reached its third-highest overall deal value since the financial crisis—deal value grew again in the first half of 2018. Compared to H1 2017, value rose 30.5 percent to US$794.8 billion when compared to the same period in 2017, while deal volumes held steady.
Activity has been brisk despite increasing macro-economic headwinds. The Federal Reserve recently raised interest rates and signaled its intention to do so again twice more before the year is out. Threats of a bourgeoning global trade war are intensifying after the imposition of tariffs by the US and other large economies. And the US stock market has experienced significantly higher volatility this year than it did last.
One could reasonably expect that M&A would cool against this backdrop, but the fact that it has not suggests that deals are going ahead for essential strategic reasons rather than opportunistic ones.
Technology and its disruptive impact across all sectors is one of the main factors that has made M&A a necessity. The impact has been most apparent in sectors such as retail and healthcare, where digital platforms are ideally placed to disrupt established service and distribution channels. No sector has been untouched, however. Unless non-tech companies have the resources in-house to write their own software and algorithms—and most do not—M&A may be the best option to keep pace with dynamic change.
We expect the second half of the year to be busy, but no one can afford to ignore the threats posed by rising interest rates, increasing protectionism, an incipient trade war that could increase tariffs, a potentially inverting yield curve, unsustainable pricing demands and a volatile stock market. Companies will need to navigate these dynamics if M&A's bull run is to continue.
John Reiss
Global Head of M&A
White & Case
Gregory Pryor
Head of Americas M&A
White & Case
PE hits new post-crisis high
Despite intensifying competition within the market, US private equity activity is yet to show signs of a downturn
Sector watch
Energy, mining & utilities leads the field
Bulky oil & gas deals pushed energy, mining & utilities close to the top spot in H1, while digital disruption ensured a steady flow of tech deals
Technology M&A gets white hot in 2018
Dealmakers across all industries are looking to secure US tech assets in order to keep up with the technological changes disrupting their industries
Consumer firms adapt to survive
Despite a drop in headline figures, M&A within the US consumer sector remains an important method to secure long-term growth
Oil & gas M&A gains cautious ground
A steadying oil price signals a brighter future for oil & gas M&A, yet market caution remains
Big-ticket deals drive pharma M&A
Activity in the sector is fueled by the need to refill product pipelines and navigate convergence between health and tech firms
Industrials & chemicals M&A gathers pace
Corporate repositioning and tax reform are two key trends driving M&A in the sector
Is blockchain M&A poised to accelerate?
US dealmakers are learning to navigate the complex world of blockchain M&A, but they will have to proceed with care in heavily regulated sectors
In focus: Financial services regulation
An overview of the financial regulatory landscape and key trends to watch
Decision time for M&A in Delaware
Noteworthy rulings out of the Delaware Supreme Court and the Court of Chancery in the past six months are already having consequences for M&A activity
Spotlight on public companies: Cybersecurity and governance
The number and severity of cybersecurity incidents at major companies has increased, causing regulators to take a tougher approach. We look at five practical steps companies can take to manage these risks
Conclusion
Key trends to watch in the months ahead
Acquirers shrugged off macro-economic uncertainty in the first half of the year to secure deals of strategic necessity
