Global M&A sector to top $3trn in ’18

Abu Dhabi / Emirates Business

The easing of key economic and political risks and the emergence of positive macroeconomic deal drivers will accelerate global deal activity in 2018, reveals
the third edition of the Global Transactions Forecast issued by Baker McKenzie.
Baker McKenzie’s global head of M&A, Michael DeFranco, said, “2017 played out as we predicted and there have been a number of positive developments in the global economy that have led to the forecast for global M&A values in 2018 to be increased from our previous forecast of $3 trillion to $3.2 trillion. This would represent the 3rd highest yearly deal value since 2001 and the 2nd highest since the financial crisis in 2008.”
In the IPO market, the forecast predicts values to climb from $187 billion in 2017 to a cyclical peak of $290 billion in 2018, a near record -breaking number. The forecast highlights why investors around the world are feeling increasingly confident as 2018 approaches, with appetites strengthened by positive trends such as more-buoyant world trade and economic growth, elevated equity valuations, and the prospect of cheaper financing in emerging markets.
“After a few soft patches in 2017 we have a more optimistic outlook for the global economy and dealmaking in 2018, as long as the brakes are not put any further on global free trade. We see an uplift in both M&A and IPO activity as dealmakers and investors gain greater confidence in the business prospects of acquisition targets and newly-listed businesses,”
said Paul Rawlinson, Baker McKenzie’s global chair. “However it’s not a done deal, with the th-reat of a Hard Brexit and a NAFTA collapse both still very real. Business will need to continue to make the case for liberal trade and
investment frameworks.”
Will Seivewright, Corporate M&A partner at Baker McKenzie Habib Al Mulla in the UAE, said, “In the Middle East, investors are still drawn to the regional demographics, GDP growth and the UAE’s
role as a hub for the region and into Africa, and they appear to have adapted to the headwinds witnessed regionally in 2017.”