Global deal-making will experience a continued hangover in 2020 thanks to ongoing worldwide economic uncertainty and the risk of global recession, according to the new report by Baker McKenzie. The report also reveals that the deal flows in North America and the Middle East are outliers to the global trend, while technology, investor activism and private equity take center stage in pushing transactions forward next year.

The firm’s fifth annual Global Transactions Forecast, produced in conjunction with Oxford Economics, projects that merger and acquisition (M&A) value will decline globally from $2.8 trillion in 2019 to $2.1 trillion in 2020. The report predicts a downward trend in IPO proceeds from an estimated $152 billion in 2019 to $116 billion, a 23% drop.

“Make no mistake — deals are getting done, but the current slowdown is inevitable considering the continuing uncertainty around trade and regulation,” said Ai Ai Wong, Chair of Baker McKenzie’s Global Transactional Group. “We know that around the world, there are many investors and companies with capital on the sidelines, waiting to move forward with domestic and cross-border deals.”

Middle East

Deal-making remain robust in the Middle East, underpinned by strong domestic activity. Some of the large transactions in 2019 include Saudi British Bank’s $5 billion merger with Alawwal bank and Abu Dhabi National Oil Company’s $4 billion sale of a 40% stake in its pipeline unit to US private equity investors KKR and BlackRock. The Middle East anticipates to close $45 billion in M&A deals in 2019, subsequently falling in line with global trends in 2020. Although Saudi Aramco’s $69 billion purchase of a 70% stake in Saudi Basic Industries Corporation should boost M&A proceeds in 2020. The region also expects a rise in IPO proceeds from $2 billion in 2019 to over $40 billion in 2020, with the potential floatation of 2% of the shares of Saudi Aramco.

“The M&A markets particularly in Saudi Arabia and the UAE have remained buoyant this year, with transaction values boosted by mega deals such as the ground-breaking merger of Saudi British Bank and Alawwal bank, and by cross-border inflows into the UAE, facilitated by recent foreign investment reforms,” said Omar Momany, UAE Head of Corporate/M&A at Baker McKenzie Habib Al Mulla. “Although we expect deal values to return to normal levels in the coming years, the Middle East is likely to remain an attractive target region for both domestic and foreign investors.”

Karim Nassar of the Corporate/Equity Capital Markets Group of Legal Advisors in Riyadh added: “While we have seen relatively subdued IPO activity globally and in other Gulf countries, the pipeline activity for listings out of Saudi Arabia continues to develop rapidly. With Riyadh’s inclusion on the MSCI emerging market index and the anticipated listing of Saudi Aramco that could raise up to $40 billion, this will definitely provide an enormous boost to global IPO proceeds in 2020 and beyond.”

North America

Easy financing conditions, the impact of earlier tax cuts and the strength of the US economy relative to Europe and Asia are driving deal activity in the US to date. Headline-making transactions this year include the $84 billion acquisition of 21st Century Fox by Walt Disney and the $8.1 billion Uber IPO. North America is expected to end 2019 with $1.5 trillion in domestic and cross-border M&A, and $1.1 trillion for 2020. Domestic IPO activity will also rise to nearly $60 billion in 2019, and drop to $42 billion in 2020.

“Coming off of 2018’s highs, deal-makers in North America have had a fairly busy 2019, even though cross-border transactions activity is down,” said Michael DeFranco, Global Chair of Baker McKenzie’s M&A practice. “Right now though, investors are becoming concerned about high valuations and rising corporate leverage, and we’ve seen the market respond less-than-favorably to a number of large deal announcements recently. Going forward, we’re working with clients on planning for a deceleration in the medium-term.”


Many factors have impacted European deal activity including Germany’s economic slowdown, the constant uncertainty of Brexit, potential trade issues between the EU and US, and increased regulatory scrutiny. European companies were reluctant to move forward with IPOs in 2019, as values dropped 60% from 2018 to $15 billion. M&A activity is also predicted to fall from $567 billion in 2019 to $427 billion in 2020, a 25% decline.

“Global IPO activity has been slow overall this year with significant political issues weighing on markets. There were bright spots, including in the domestic US market, which outperformed its 2018 totals,” said Koen Vanhaerents, Global Chair of the Capital Markets practice. “We’re in for a turbulent 2020, but the appetite is still there for capital raising, and the pipeline is quite robust. There is a light at the end of the tunnel in 2021.”

Asia Pacific

Asia Pacific deal-making has also fallen from highs in 2018, due to the US-China trade dispute as well as increased Chinese government scrutiny leading to sluggish Chinese outbound deal activity. Japan has proven to be the exception to the slowdown, as conglomerates sell non-core assets and companies look for outbound acquisitions.

Looking forward in the region, the forecast predicts M&A activity declining 18% from $634 billion in 2019 to $529 billion in 2020, and IPO activity will likely continue its slower trend from this year, which we expect will amount to $36 billion, a 43% decline from 2018.

Latin America

The 2019 deal environment in Latin America varied greatly depending on country, with a mix of investor-friendly policy reforms in Brazil and political and economic turmoil in other areas. We expect to see a drop in M&A activity in 2020 from $90 billion in 2019 to $77 billion. The IPO market should also slow with hope for a rebound in 2021.

Global economy to rebound in 2021

Amid the global slowdown in the transactions pipeline, there are three main deal drivers for activity in the foreseeable future:

  • Technological disruption: Across all sectors, companies will seek to acquire advanced digital capabilities that they cannot replicate in-house in order to remain competitive.
  • Activist funds and stakeholder capitalism: Activist investors and a heightened emphasis on stakeholder capitalism will keep pressure on boards to re-structure and respond accordingly with strategic changes.
  • Private equity ‘dry powder’: Private equity investors may seize upon the opportunities created by market volatility and keep transaction volumes afloat.

Last year’s forecast predicted an overall slowdown of the M&A market in 2019 and into 2020, which is consistent with current expectations. However acquisitions do remain an important growth strategy for companies worldwide, and with economic conditions expected to improve in 2021, the forecast predicts a subsequent uptick in transaction activity.

“We’ve all seen so many of these cycles over the past 20 to 30 years,” said Ai Ai Wong. “Although markets today are driven by different forces, especially by the influence of technology, we cannot escape the ebbs and flows of markets and the interconnectedness of the world’s economies.”

Alternative Paths for the Global Economy

A range of upside and downside risks could impact the global economy and lead to a rise or drop in deal values and volumes that differ from the central transactions forecast presented in this report. To explore both upside and downside risks, the report looks at five different economic scenarios: Trade War Escalation; Protracted Eurozone Slowdown; US Recession Hits the Global Economy; No-deal Brexit; and Trade War Fears Fade. To understand how these hypothetical outcomes might impact the global economy and the implications for deal-making, you can go to our online GTF Interactive Tool (

Download the country forecasts below.

GTF2020 UAE Forecast

GTF2020 Saudi Arabia Forecast 



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