Despite concerns about a looming downturn and persistent geopolitical uncertainty, 2019 was a continuation of the run in US M&A that took off in 2014. The value of deals targeting US companies reached US$1.52 trillion, 47 percent of the global total. Down a hair on 2018, 2019 was the sixth consecutive year in which US deal value topped US$1.3 trillion—and only the third year on record above US$1.5 trillion. Private equity (PE) value hit a new post-crisis high of US$408 billion.
Compared to 2018, the number of transactions was down 2 percent to 5,757 deals, making 2019 the third most active year by volume.
Trends driving M&A activity since 2014 continued to power the market—and they show little sign of abating in the near term. Megadeals drove value, with 53 transactions accounting for US$888 billion, nearly 60 percent of the total value of US M&A. Valuations remained high, but with interest rates low and capital markets at record levels, financing remained easy. And PE firms ended the year with yet another record for dry powder—US$1.5 trillion, according to Preqin.
Perhaps most importantly, fundamentals of the US economy remain strong. The unemployment rate stayed stable at 3.5 percent. The economy grew by 2.3 percent, according to the US Commerce Department—and it is set for continued moderate growth in 2020.
Dealmakers seemed invigorated heading into 2020, and we expect the market to be active this year. Concerns about trade wars and downturns have abated, at least for now. Of course, economic and geopolitical uncertainties remain high, the pace of dealmaking was slow at the start of this year, and 2020 is an election year. But assuming there are no unexpected shocks—particularly related to trade, Middle East tensions or the coronavirus—the run looks set to continue.
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