Rate of global M&A slowest for three years thanks to Fed uncertainty and China

Madeline Ratcliffe
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Uncertainty over the Fed's rate rise has spooked dealmakers (Source: Getty)

Global M&A will slow over the next six months as interest rate uncertainty and the global slow-down led by China erodes business confidence.

2015 is on track to be a record year for M&A, according to a forecast from Intralinks, but the number of early-stage deals being prepared is slowing.

Globally, there is likely to be a 5.6 per cent increase in mergers in the first three months of 2016, the slowest growth for three years.

But the UK is outperforming the global market, on track for an 18 per cent rise, far better than in the US, where the number of early-stage deals was down three per cent over the three months to the end of September.

Philip Whitchelo, vice president of strategy at Intralinks told City A.M. this was due to the Federal Reserve's “very conflicting signals” unnerving dealmakers.

He said Europe had done well (with an 11 per cent increase in early M&A activity) thanks to looser monetary policy, and the possibility of future quantitative easing, and added the UK and Europe's companies were seen as “safe, high quality assets” especially for Asian businesses looking beyond the troubled region.

Whitchelo added that emerging markets has “reached the bottom” and would start picking up as “commodities have been baked into prices there,” and “consumer companies are looking to invest in their growing markets, it's an attractive demographics, similar to China 20 years ago.”

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