Global M&A activity remains strong despite protectionism and government intervention

 
William Turvill
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More than 18,000 deals were agreed across the world in the first half of 2017, according to EY (Source: Getty)

Rising protectionist sentiment and government intervention have not been enough to create a major dent in mergers and acquisitions (M&A) activity this year, according to a report out today.

Global deal values totalled $1.4 trillion (£1.1 trillion) in the first half of 2017, which EY said represented a “modest decline” of four per cent on the same period last year.

The accountancy giant suggested the decline could be explained by a fall in so-called mega-deals, those valued at $10bn-plus.

The number of deals agreed in the first six months of the year, meanwhile, was up four per cent from 17,642 to 18,363 , according to EY.

UK deal activity “remains very robust”, the report said, with a “significant boost in outbound M&A offsetting a drop in inbound deal value”.

Significant UK deals during the first half of the year included Tesco’s £3.7bn deal for Booker, Macquarie’s £2.3bn deal for the Green Investment Bank and the £2.1bn takeover of Atkins by Canada’s SNC-Lavalin.

“The UK’s involvement in global M&A points to UK companies continuing to look abroad for deals and being attractive for inbound acquirers,” said EY’s Steve Ivermee. “The outlook for the UK economy and UK’s trading relationships may be uncertain, but many UK companies possess qualities, such as a focus on innovation and global presence, that will continue to make them attractive.”

On the global situation, he added: “Geopolitical shifts and rising nationalism has brought additional M&A complexity, but companies are overcoming those barriers.

“Growth remains the number one priority, and M&A is a route to achieve that. However, given the changing environment, dealmakers may need a broader narrative around purpose and the concept of inclusive growth to keep all stakeholders onside.”

The report also noted a rise in private equity. Funds acquired $124bn of assets in the first half of the year, up 14 per cent.

Read more: Brexit? What Brexit? M&A between UK and EU doubles in first half of 2017

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