GLOBAL STATISTICAL UPDATE – XBMA Quarterly Review for First Quarter 2012

Executive Summary/Highlights: 

  • Global M&A volume in Q1 2012 was US$481 billion (US$1.9 trillion on an annualized basis), down 16% from Q4 2011.
  • Many ingredients of an M&A resurgence are present, including would-be strategic and private equity acquirers’ considerable cash stockpiles and improving balance sheets, a historically low cost of debt financing for investment grade borrowers, rebounding equity markets, pent-up demand for resources, and attractive divestiture targets.  However, continued stock market uncertainty, European economic woes, and antitrust, banking, and other regulatory pressures in the United States, Europe, and China continue to slow the pace of deals.
  • M&A volume in Asia and North America declined in Q1, but European M&A notched gains for the second consecutive quarter.  Europe contributed 29% of global M&A volume in Q1, eclipsing the United States (27%).  Europe and the United States continued to drive global M&A volume, although to a lesser extent than in 2011, underscoring the important role of M&A in emerging markets.
  • Cross-border deals accounted for 36% of global M&A volume in Q1, apace with 2010 and 2011 levels.
  • Cross-border transactions have increased steadily since 2009, particularly in the Energy & Power, Materials, and High Technology sectors.  The race to control natural resources continued to drive significant global M&A volume, with the Energy & Power sector producing nearly US$440 billion of global M&A and US$175 billion of cross-border M&A over the past 12 months.  The Materials sector bucked broader M&A trends and produced more M&A volume in Q1 than in any of the previous three quarters.  Deal volume in the Financial and Healthcare sectors, however, fell for the third consecutive quarter.
  • Distressed deal volume has hit recent historic lows as the global economy continues to improve.
  • “Mega deals” were notably absent in Q1, with just one deal exceeding US$10 billion in value.