Forging Ahead: H1 in review
Overall deal count was down but value was up, and inbound value spiked, compared to H1 2016
M&A holds steady against uncertainty and risk
First-half activity remains on a par with 2016 as strong fundamentals continue to drive M&A
Though US M&A faced challenges in H1 2017, the figures show that the market is active and vibrant. There were 2,413 deals worth US$588.5 billion recorded in H1 2017, up 0.5 percent by value compared to US$585.4 billion registered in H1 2016. If activity continues at its current level, US dealmaking is on track for another strong year.
Low interest rates, steady economic growth and a strong stock market have provided a favorable macro-economic backdrop for M&A. Following a string of megadeals, the consumer sector posted its highest half-year value on Mergermarket record. Meanwhile, the disruptive impact of technology across all industries has prompted a flurry of deal activity, as established companies react to new business models and customer habits.
At the same time, the market has thrown up unprecedented challenges for dealmakers to navigate. Inbound activity from China, one of the most active M&A investors in the US in recent years, has fallen sharply so far this year due to a combination of protectionist leanings in the US and tighter outbound M&A regulation in China. Furthermore, dealmakers are grappling with the evolving threat of cybercrime, forcing them to adopt a more stringent and focused due diligence strategy.
And the Trump administration’s pro-business agenda has not yet delivered the boost to M&A that many had anticipated. Deregulation and tax cuts may encourage transactions in the future, but currently there are questions around the ability of the administration to implement its agenda.
The success or failure of President Trump’s policies—including those on tax, foreign investment, infrastructure and deregulation—will prove critical in determining the strength of US M&A. But despite current market uncertainty, the fundamentals supporting dealmaking remain favorable, and M&A’s strategic value is as relevant as ever.
John Reiss
Partner, New York
Gregory Pryor
Partner, New York
Private equity adapts in a seller's market
Buyout firms are exploring new ways to deploy dry powder.
Sector watch
Overview: Consumer consolidation drives top end deals
Consumer lead sectors in value in H1, followed by energy, mining & utilizes and pharma, medical & biotech; technology, media and telecommunications lead in volume
Retail firms embrace digitalization
Competition from online retailers pushes traditional firms to acquire disruptive market entrants.
Oil and gas M&A stages cautious comeback
While oil prices continue to fluctuate, a pro-oil administration and midstream activity mean that M&A is gaining momentum.
Power M&A loses its spark
A slew of blocked deals has caused a hesitant environment for deals within the utilities space, while the renewables sector offers an attractive alternative.
Fintech forces the fate of US financials
Banks and insurers turn to M&A as technology transforms how financial services are purchased and used.
Drive for connectivity fuels manufacturing and industrials M&A
Convergence between sectors generates deals, while dealmakers adopt a wait-and-see approach in response to Trump's policies.
Healthcare deals flourish, but uncertainty looms large
Megadeals fuel pharma activity while healthcare dealmakers face antitrust hurdles.
Cross-sector deals drive technology M&A
Tech firms transcend sector boundaries in their race to innovate, while Trump's immigration policy casts a cloud of uncertainty over the industry.
Conclusion
Tech, Trump and tackling the unknown: Key trends for the months ahead
Dealmakers' ability to adapt to market changes and tackle external challenges will prove crucial in getting deals done.
