Benchmark International Blog

Megadeals to be Replaced by Smaller Deals in 2016

Written by Benchmark International | February 22, 2016 at 3:59 PM

M&A activity in 2015 produced record-breaking results as five of the 20 biggest deals in history were announced. On the heels of this performance, top analysts are looking forward to what 2016 has in store.

Leading global financial services firm, JPMorgan Chase & Co, has released its M&A Global Outlook for 2016. Its findings anticipate that ‘megadeals’ will probably be replaced by a rising number of smaller deals over the next 12 months, as growing cash reserves keep last year’s record-breaking takeover momentum going.

There are already signs that the number of deals will rise, as acquisitions announced rose every quarter last year according to data compiled by Bloomberg. In fact, there were more deals announced in the fourth quarter than any other in the last decade and Intralink’s Deal Flow Predictor (an indicator of future mergers and acquisitions announcements) forecasts growth of 3.5% in the global number of M&A deals to be announced in the first half of 2016, when compared with last year.

Despite market fluctuations at the beginning of this year, it is anticipated that global growth will bounce back thanks to activity across Asia Pacific (APAC). Driven by Chinese acquisitions, worldwide activity has hit £91.57 billion so far in 2016 - an increase of 31% compared with a year ago - and the strongest year-to-date period since 2006.

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