Mergers and Acquisitions Report: Downturns Are a Better Time for Deal Hunting (Boston Consulting Group)

Summary

• Global M&A value increased by about 7% in 2018, close to the five-year average.§2
• Deal volume declined by 3%, with about 35,800 deals announced during the year.§2
• 17 megadeals were announced in the first three months of 2018, versus 14 in the remainder of the year.§1
• M&A volume dropped to 15,400 deals in the first half of 2019, approximately 3,000 fewer than in the first half of 2018.§4
• Median deal multiples declined to 13.7x in 2018 and to 13x in the first half of 2019.§5
• Value of global cross-border M&A grew by 45% in 2018, while volume declined by 6%.§3

Key insights

1. Europe and North America drove the global increase in deal value in 2018 with growth rates of 7% and 5%, respectively.§3
2. Deal volume declined by 11% in Europe and 13% in North America.§3
3. Outbound M&A from China fell sharply compared with the 2016 peak, by 78% in value and 31% in volume.§3
4. Media and entertainment led deal value with a 42% increase in 2018.§3
5. Among 21 megadeals in the first half of 2019, the largest was United Technologies' $87 billion bid for Raytheon.§4
6. Comparing the first half of 2019 with the first half of 2018, deal value fell 60% in Europe and 45% in Asia-Pacific, while North America rose 16%.§4
7. Acquisition premiums rose to 31.2% in the first half of 2019, against a long-term average of 30.6%.§5
8. Reserves of dry powder among PE firms increased by 15%, up by 74% since 2013.§6