Global M&A Activity

A new record could be made in the first half of 2018, according to accountancy firm Deloitte, as the value of global mergers and acquisitions (M&A) is set to soar to new heights.

The value of deals announced in the first four months of 2018 has already surpassed $1.7bn (£1.3bn), the highest since total for this point in the year since the millennium and already far above the $1.3bn announced in the whole of 2017's first half.

This was the fastest growth rate in value ever, as the number of deals appears to be stabilising. Deloitte predicts global deal volumes to remain at 24,886 for the first half of this year, fractionally below the 25,015 announced in the first half of 2017.

“While it is difficult to predict how long this flourish in mega-deals will continue, we are undoubtedly seeing an urgency to spend now," said Deloitte's Iain Macmillan.

"Companies have strong balance sheets matched with robust debt markets. This means those that did not do major deals in the last couple of years are eager to and don’t want to be left behind industry wide transformations.

Shareholder activism has also been on the rise, which is driving M&A as companies are forced to make changes to boost investors' returns.

The primary demands have been centred around restructuring the company's portfolio of activities and making investments in innovation, Macmillan added.

This is expected to boost the sell-off of non-core assets, with Deloitte research showing that 70 per cent of companies expect to make at least one sale this year.

Private equity firms may emerge as a strong contender for the businesses, as they are currently sitting on almost $1 trillion of investors' money which needs putting to work.

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