• Monday, June 24, 2024
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BusinessDay

Deal making holds ground in H1’16 despite volatile market

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Despite high levels of volatility in capital markets and uncertain economic growth, the global deal making held its ground in the first-half (H1) of 2016.

Deal volume remained relatively flat with 17,642 deals announced in the first-half of 2016 against 17,665 in 2015 and 17,464 in 2014.

While headline deal value fell by 18% in the first six months, compared to the same period in 2015, the shortfall was almost entirely driven by eight fewer megadeals (over $10billion). This year’s deal value is also flat against 2014 but up 35% against 2013.

Digital will drive future deals as 67% of executives plan to buy new capabilities, according to new EY study. The study which notes robust global Mergers & Acquisition (M&A) despite market volatility and geopolitical uncertainty indicated that shifting economic power is seeing Chinese outbound deals at record levels.

Steve Krouskos, EY Global vice chair –Transaction Advisory Services, says: “Businesses need growth to satisfy investors and – in many cases – organic options alone are not providing enough momentum.

“In addition, disruptive change across the whole business landscape is intensifying competition and impacting core business models. Doing nothing is not an option for many companies as they look to seize competitive advantage, bolster growth prospects and manage costs through deals,” Krouskos added.