The trends and insights highlighted in the Global dealmakers: Cross-border M&A outlook 2019 report very much reflect our observations at Baker Tilly. We continue to see an uptick in cross-border deal activity and robust transaction activity in the U.S., with private equity leading the way. Deals are still being priced to perfection, which is requiring more rigorous quality of earnings, tax, IT, operational and legal due diligence. That said, regulatory requirements and cultural differences will frequently derail cross-border transactions. Participants need to anticipate these issues before diving in too deep.Bill Chapman, Partner – Baker Tilly, North American Corporate Finance Lead – Baker Tilly International
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Global dealmakers: cross-border M&A outlook for 2019 and beyond
In the first half of 2019 (H1 2019), global merger and acquisition (M&A) value reached $1.86 trillion, increasing 21 percent from H2 2018 ($1.5 trillion). Although this was 8 percent less than the H1 2018 ($2 trillion in announced deals), it was the second-highest half year on record.
Likewise, while M&A volumes have slowed – declining 12 percent from H1 and H2 2019 to some of the lowest levels since 2015 – viewed within the historical context, dealmaking remains robust and it could continue to be so into the year ahead.
To take the pulse of the current M&A market and get a sense of executive and investor intentions for 2019 and the year ahead, Baker Tilly International conducted research with Mergermarket to interview 150 dealmakers from across the globe. Some of the key findings include:
- 54% predict an increase in M&A activity in 2020
- 71% expect to increase their cross-border M&A spend in 2020 despite heightened geopolitical risks, rising protectionism and whispers of a recession
- 35% feel cross-border deals are risks worth taking
- The middle-market is expected to account for 67% of deal volume in 2020
- The U.S. is the top market where dealmakers will invest in the next 1-2 years
The full report explores current trends and challenges shaping the global market for M&A, while also exploring opportunity areas where dealmakers are likely to find value in the year ahead, including key growth markets and hot sectors. All of this is in an effort to provide a roadmap and practical insights for dealmakers to consider into 2020 and beyond.
For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.
This article was originally published by Baker Tilly International.
