Political turbulence and economic uncertainty are becoming the new normal for dealmakers, however, the impact on M&A activity has not been as steep as many expected, according to Baker McKenzie's Cross-Border M&A Index.
"Japan dominated outbound M&A activity from Asia-Pacific. Deals were spread across a number of sectors, including financial services, telecommunications and industrials; however, the largest deal came in the pharmaceutical sector, where Takeda Pharmaceutical bought US-based biotech company Ariad for US$4.9bn," said Steven Glanz Australian head of M&A at Baker McKenzie.
According to the Baker McKenzie Index: with an aging population, limited opportunities on the home front and less competition from Chinese rivals (for the moment), Japan will continue to be a formidable force in cross-border M&A
Steven said: "The consumer, energy and utilities, and pharmaceutical sectors all performed exceedingly well and while volatility remains in international markets, I believe M&A activity will pick up in Australia this year."
Steven commented: "When you look at cross-border deals, which is what the Index is focused on, Australia was relatively busy with a number of outbound and inbound transactions. Interest in Australia's industrial sector looks to be a keen focus."
In 2016, globally there were 942 cross-border deals in the industrials sector, an increase of 23 on 2015 and a post-crisis record. Value also hit a post-crisis high of US$116.8 billion in 2016, a 48% increase over 2015.
This year industrials are off to a solid start as the second most targeted industry, after technology, with a total volume of 171 deals and a total deal value of US$16.8 billion globally. The deal market is expected to continue thriving in 2017 with four specific trends underpinning M&A in the sector – disruption and technological innovation; core competencies and divestments; aftersales services; and defense spending.
Baker McKenzie in Australia capped off a stellar first quarter, topping the Thomson Reuters League tables for mergers and acquisitions
According to Thomson Reuters, Baker McKenzie was number one for deal value in the first quarter of this year, well ahead of the pack. The Firm came second in number of deals counted for the quarter.
For more information on Baker McKenzie's Cross-Border M&A Index, please see: http://crossbordermaindex.bakermckenzie.com/.