GLOBAL STATISTICAL UPDATE – XBMA Quarterly Review for First Quarter 2015

Executive Summary/Highlights:

  • Global M&A volume in Q1 was US$854 billion, the highest Q1 volume in recent years, carrying momentum from a strong 2014 into 2015.  If deal activity continues at its current pace, global M&A activity in 2015 will at least match last year’s strong volume of approximately US$3.5 trillion.
  • 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, notwithstanding continued regional tensions in central Europe and the Middle East and lingering concerns about growth in some economies.
  • The United States is off to a fast start in 2015, accounting for approximately 50% of global deal activity in Q1.   Q1 deal activity was headlined by a number of U.S. megadeals, including Heinz’s US$55 billion acquisition of Kraft and AbbVie’s US$20 billion acquisition of Pharmacyclics.
  • At its current pace, cross-border M&A activity will account for 31% of global deal volume in 2015.  Cross-border M&A activity is on pace to reach close to the same level as 2014, which itself was a significant increase over prior years, as companies continue to seize opportunities for growth and expansion in overseas markets.
  • The United States, Europe, and China accounted for 90% of Q1 deal activity, compared to a recent average of 75%.

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