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M&A Activity Drops: No Fast Recovery

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July 2, 2012

Thomson Reuters data. Mergers and acquisitions activity fell 25 percent worldwide in the first half of 2012 as global economic uncertainty reined in companies’ expansion plans — and bankers don’t expect much improvement over the rest of the year, reports IVC Post.

 

Deals announced totaled slightly more than USD1 trillion to June 19, down from USD 1.33 trillion over the same period last year, according to preliminary Thomson Reuters data. The report predict three more slow months, in the absence of an “obvious catalyst” and this rich balance sheets and lowering valuations.

Other findings

  • U.S.-targeted M&A fell sharply in the first half – by 44 percent compared to last year.

 

  • European M&A volumes were only down 7 percent at $354 billion over the same period, boosted by some of the largest deals during the first half.

 

  • Deal volumes in Asia Pacific (excluding Japan) fell 23 percent to $175 billion over the period ended June 19.

 

  • Energy and power deals accounted for 19 percent of the first half M&A volume. But deal activity was down 28 percent from the same period in 2011.

 

  • PE-backed acquisitions fell 19 percent or about one-tenth of overall deal volume.
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