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Global M&A Drops But Still Fourth-Highest Level Since 1980

Tom Burroughes, Group Editor , 2 January 2020

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Merger and acquisitions are important minters of new millionaires around the world. Fresh figures suggest that 2019 was a solid year and one of the highest ever, but down a touch from levels tracked in 2018.

The value of global merger and acquisition deals, which are important drivers for creating new high net worth individuals, fell by 3 per cent in 2019 to $3.9 trillion, according to figures reported yesterday by Refinitiv, the market data and analytics firm.

While the firm did not spell out why there had been a fall, it is possible that geopolitical uncertainties last year (such as over Brexit, US-China trade clashes and the Hong Kong protests) may have had a drag effect. Even so, it is the fourth largest year-to-date result for M&A since records began in 1980.

Global M&A for deals greater than $10 billion increased by 28 per cent compared with those taking place in 2018, topping $1 trillion in deals for the first time since 2015. Fourth quarter 2019 M&A rose by 28 per cent compared with the same point during the third quarter of 2018.

Powered by 15 US domestic M&A deals in the list of top 20 deals in 2019, M&A in the US hit $1.8 trillion, rising 6 per cent compared with 2018 and a four-year high. European M&A activity hit $742.1 billion, down by 25 per cent compared with 2018 and the slowest period for deal making in the region since 2016. Asia-Pacific M&A activity totalled $756.8 billion, down by 16 per cent from 2018 and the slowest period for M&A in the region in five years. Deal making in the Africa/Middle East region totalled $160.6 billion in 2019, more than double compared with a year before and was an all-time high.

Deal-making targeting the healthcare sector hit $532.5 billion in 2019, rising by 26 per cent compared with 2018. M&A in the technology sector totalled $528.6 billion during 2019, up by 4 per cent compared with 2018. Deal making in the energy and power sector accounted for 13 per cent of global M&A this year with $501.5 billion of deals announced and fell by 24 per cent compared with 2018 levels. Industrials deal-making accounted for 12 per cent of activity and rose by 11 per cent in 2019 compared with a year ago.

Global private equity-backed M&A activity totalled $478.5 billion during 2019, a 4 per cent increase compared with 2018 and the strongest period for global buyouts since 2007. Private equity deals accounted for 12 per cent of overall M&A, on par with 2018 levels. 

Cross-border M&A totalled US$1.2 trillion during 2019, sliding by 25 per cent compared with a year earlier and the slowest period for cross-border deals since 2013. Cross-border activity accounted for 30 per cent of total M&A activity in 2019, down from 39 per cent a year ago. The US initiated 20 per cent of all acquisitions abroad in 2019 with $232.7 billion in deals, while China outbound acquisitions accounted for 4 per cent of cross-border activity.

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