- Global M&A volume in Q2 was almost US$1.4 trillion, significantly higher than the average quarterly volumes in recent years and the most active quarter since the financial crisis. Year to date M&A volume was ~US$2.25 trillion. These USD figures were recorded despite the strength of the dollar when measuring values for deals stuck in other currencies.
- The surge in M&A activity over the last several quarters is being driven by large corporate cash balances (carried at virtually zero return) and high stock prices that together provide strong acquisition currency, attractive financing for most corporate borrowers, a strong U.S. and strengthening global economy, and continued industry consolidation.
- Strategic acquisitions are driving recent volume, with companies looking to consolidate market position and boost returns through external growth. The Chinese M&A market has also contributed significantly to global M&A activity.
- At its current pace, cross-border M&A activity will account for 34% of global deal volume in 2015, consistent with recent levels.
- Europe had its best quarter in years, accounting for 33% of global M&A activity in Q2 (compared to an average of 26% from 2010-2014). Chinese M&A also continued to experience strong volumes, accounting for 17% of global M&A activity.
- As always, hope is mixed with fear as market participants look to the remainder of the year and the longer future, with the ultimate impact of disruption in the Chinese stock market, the continuing Greek crisis, broader Eurozone infirmities, Brazilian stagnation, and larger geopolitical trends all possible of erupting into truly disruptive events. In the meantime, CEO and boardroom confidence is high, and market participants expect that the M&A pipeline will support the present pace for the rest of the year.