Cross-border dealmaking declines in 2019

There's no place like home: cross-border dealmaking declines in 2019 as investors look to domestic markets

Allen & Overy's M&A Insights Q4 2019 report* reveals a decline of 27% in the value of cross border deals in 2019 compared with 2018 and a dominance of large domestic transactions globally with the top 10 deals in the year all within one country. Moreover, overall global trends show that deal values and volumes are down by around 7% and 10% respectively but despite this, 2019 is still set to be the third strongest year to date in terms of value and the fourth strongest in transaction volumes for a decade.

The strength of the global market is underpinned by a resurgence in strategic megadeals, which are once again powering the market. Deals over USD5 billion account for 43% of the value of worldwide M&A and deals worth more than USD10 billion make up 33% of total value.

Commenting on this trend, Dirk Meeus says: "The fact that the market is still so strong when anxieties are rising around macro-economic issues is proof that many investors are keeping their nerve. Next year may well test this resolve more sharply but investors will, we believe, continue to be active, absent significant political or economic shocks."

We’ve seen a slowdown in global dealmaking in almost all sectors, with the exceptions of the financial services sector seeing a 9% increase and the life sciences and healthcare sector with a 19% increase in deal value in 2019 compared to 2018.

Geographically, Europe is down significantly with the market at its weakest since 2017 accounting for 18% of global deals by value which represents a decline by value of 27% compared to Q4 last year.

The report also includes a longer read article on the increasing attractiveness of consortiums. It explores how companies looking to harness the power of technology to transform industry processes or even entire markets are increasingly opting for consortium deals to spread the risks, costs and rewards.

* Figures represent deals announced between 1 January 2019 and 30 November 2019. Data provided by Refinitiv.

Related : Allen & Overy (Belgium) LLP

LexGO Network