Question

The global M&A market remained strong in 2018 with announced transaction volumes reaching $4.1 trillion, the third highest year ever for M&A volumes. Announced volume in the first half of 2018 was robust, representing the second highest first half of all time ($2.4 trillion). Activity was largely driven by “megadeals” (greater than $10 billion in size). Thirty megadeals were announced in the first six months of 2018 — the highest first-half megadeal count on record — compared with 14 deals in the first half of 2017. The number of megadeals began to normalize throughout the second half of the year, although they continued to be a significant driver of activity in 2018 (overall up 38%, 44 deals in 2018 compared with 32 in 2017, the second highest in the past 10 years). While megadeals were a large driver of M&A announced dollar volumes in 2018, the count for deals greater than $250 million also increased by 7% from 2017, with activity remaining robust across all deal types. Activity was brisk across domestic and international deals, strategic and private equity, and across all sectors, with technology (17%) and healthcare (12%) representing the largest contributors to global volume in 2018. Private equity funds continued to have ample “dry powder” and deployed this capital throughout 2018; sponsor buy-side volume was up 9% YOY. Several of the key drivers and catalysts of M&A have continued from prior years. Positive global growth, improving cash flows, strengthening balance sheets, low cost of debt, investor support and CEO confidence all continued to boost M&A activity. The biggest new tailwind this year was the implementation of tax reform in the U.S., which helped generate incremental cash flows and provided access to overseas funds. Innovation, disruption and the need for growth also contributed to M&A activity, driving change across industries, geographies and organizations. An accelerating rate of disruption has driven the need to act with urgency. As a result, new consumption patterns, new platforms and

Answer 1

The strong performance of the global M&A market in 2018 was characterized by a combination of megadeals, diverse sector involvement, and the influence of private equity the continued presence of key drivers and the emergence of new catalysts underline the dynamic nature of M&A as a strategic tool for companies navigating a rapidly evolving business landscape.

technological advancements have pushed companies to pursue M&A strategies for growth and adaptation.

The data presented highlights the significant momentum in the global M&A market during 2018, showcasing various trends and drivers:

Megadeals as a Driving Force:

The surge in announced transaction volumes was primarily fueled by megadeals, particularly those exceeding $10 billion.

The first half of 2018 witnessed a record-breaking number of such megadeals, setting the stage for a robust year in M&A activity.

Normalization of Megadeals:

While the count of megadeals began to normalize in the second half of the year, their impact remained substantial throughout 2018.

The year-to-year increase of 38% in overall megadeals signaled sustained high-value transactions, indicating a continued appetite for large-scale M&A.

Diverse Deal Types and Sectors:

The M&A activity was not confined to specific sectors or deal types.

The report highlights brisk activity across domestic and international deals, strategic and private equity transactions.

Technology and healthcare emerged as significant contributors, representing 17% and 12% of global volume, respectively.

Private Equity Influence:

Private equity funds played a pivotal role, with ample "dry powder" available for deployment.

The 9% year-over-year increase in sponsor buy-side volume attests to the active participation of private equity in driving M&A activity.

Continuation of Key Drivers:

Positive global economic growth, robust cash flows, strengthened balance sheets, low cost of debt, investor confidence, and positive CEO sentiment remained consistent drivers of M&A.

The implementation of tax reform in the U.S. further contributed to increased cash flows and access to overseas funds.

Strategic Response to Disruption:

The report suggests that innovation, disruption, and the imperative for growth served as catalysts for M&A.

The accelerating rate of disruption in various industries prompted companies to act with urgency, leading to strategic acquisitions as a response to changing consumption patterns and technological advancements.

Global Reach:

The M&A surge was not limited to a specific geographical region, indicating a global nature of the market.

Both domestic and international deals were robust, emphasizing the interconnectedness of economies and businesses on a global scale.