June 2015

Global Transaction Forecast: Assessing future M&A and IPO activity

Our Global Transaction Forecast provides corporate leaders and investors with a rare peek into the future of M&A and IPO activity around the world. Based on statistical analyses by Oxford Economics and input from our partners, we forecast global and regional transaction volumes and values from 2015 to 2020.

We arrive at our predictions by examining historic and current trends in M&A and IPO activity in relation to key drivers of these transactions, such as equity prices, interest rates and economic reforms in various countries. It is the only comprehensive quantitative analysis in the market that uses this correlation to predict future deal-making at a global, regional and country level.

Knowing that transactions are an important vehicle for our clients to expand into new markets and acquire customers, distribution channels, intellectual property, industrial assets and natural resources, we want to help business leaders anticipate and become better prepared for future market fluctuations.

Our report outlines the six macroeconomic trends that will drive global economic growth over the next few years, potential risks, and how current economic conditions will impact future M&A and IPO activity in six sectors and 37 countries.

Global forecast

  • Global M&A and IPO activity will continue rising in the next three years, peaking in 2017 in developed markets and 2018 in emerging markets.
  • Global economic growth will accelerate, and low interest rates and easy credit conditions in key countries are likely to maintain upward momentum in equity markets.
  • The transaction peaks in 2017 and 2018 won't be as high as those before the global financial crisis, as we are not experiencing the same bubble-like conditions prior to 2007.
  • As the global economic recovery continues and central banks begin to raise interest rates, equity markets will decline, leading to a moderate downturn in global deal-making by 2018.
  • Emerging market M&A activity will capture a larger share of total deals, rising to 21% of total transactions in 2018, up from 18% in 2014.

 

Regional M&A forecast

  • North America will experience strong levels of deal-making for the next three years, particularly the US.
  • M&A deals in Europe will rise, driven largely by inbound transactions by US companies taking advantage of a strong US dollar.
  • Asia will re-emerge as one of the world's most dynamic growth stories, beginning with a resurgence of cross-border transactions next year.
  • Growth prospects in Latin America will improve as a result of policy reforms in countries like Mexico.
  • Africa and the Middle East will see more deal-making activity as oil prices rebound over the next few years.

 

Regional IPO forecast

  • Domestic IPOs in North America will recover from last year's dip, pushing toward a new record of US$82 billion by 2017.
  • IPOs in Europe will slow this year, amid uncertainty linked to parliamentary elections, with an upswing in activity to return next year.
  • IPO activity in Asia Pacific will accelerate over the next three years, peaking at US$87.4 billion in 2018.
  • Emerging markets-based companies will continue pursuing cross-border listings to raise capital in deeper, better capitalized markets in the US and UK.

Visit our Global Transactions Forecast site for dedicated resources about future M&A and IPO activity.

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