Global Mergers and Acquisitions reach record high in first quarter

Mar 29, 2018

Global mergers and acquisitions (M&A) had their strongest start ever in the first quarter of 2018, totaling $1.2 trillion in value, as U.S. tax reform and faster economic growth in Europe unleashed many companies' deal-making instincts.

Strong equity and debt markets as well as swelling corporate cash coffers also helped boost the confidence of chief executives, convincing them that now is as good a time as ever to pursue transformative mergers

"The clarity on tax has unclogged some of the M&A activity that was strategically imperative, but companies were waiting for the right financial timing," said Anu Aiyengar, head of North America M&A for the firm.

In the United States, the stock market rally was thwarted in the first quarter by President Trump's announcements on trade tariffs on Chinese imports. Corporate valuations are still elevated, but market volatility has increased. While the U.S. was up 67 percent in the first quarter, M&A volumes doubled in Europe and Asia was up 11 percent.

British companies are bulking up in preparation for the post-Brexit era.

Dwayne Lysaght, the head of UK M&A at J.P. Morgan Cazenovia, said there is “a bit of a Brexit squeeze which is encouraging a focus on domestic consolidation.”

“British companies are acknowledging the need to be bigger to compete in a more open, global market place,” he added.

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