Executive Summary/Highlights:

• Global M&A volume in Q3 was US$538 billion, down 13% compared to Q2 2012, but the cross-border component remained strong and is on pace to match 2011annual volumes.
• Despite companies’ substantial cash stockpiles and the availability of cheap debt, M&A activity stagnated somewhat in Q3.  Some companies appear to have taken a wait-and-see approach to the results of imminent political transitions in both the United States and China. Other deterrents to deal volume include the continued crisis in Europe, a weak U.S. recovery and slowing growth in key markets such as China and Brazil.
• North American and Asian-Pacific M&A activity increased, while European M&A declined for the first time in three quarters. The United States and Europe accounted for a combined 64% of Q3 M&A volume.
• 41% of global M&A has been cross-border this year – the highest proportion since 2007.
• The number of “Mega deals” (exceeding US $10 billion in value) decreased as compared to Q2 2012 (only two deals in Q3 compared to six in Q2) but increased as compared to Q1 2012 (1 deal in Q1); both Mega deals this quarter featured Chinese acquirers.  Medium and large deal activity remains substantially higher for both domestic and cross-border deals than in 2009, but is still down 44% from the high of 2007.
• Energy & Power continued to lead global and cross-border deal activity on a quarterly and annualized basis, and cross-border activity in the Industrials and Media/Entertainment sectors each reached peak levels in Q3.

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