The Deloitte M&A Index
H2 2013 – Recovery in deal volumes expected in H2 as sentiment improves.
Deloitte UK predicts a 6% increase in global M&A deal volumes for H2 2013 compared to H1. A steady recovery, both in terms of optimism and the economy, across the developed markets is expected to drive this uptick with the US leading the way. Dealmaking conditions are becoming increasingly positive with corporate balance sheets healthy and with large cash reserves, credit readily available through both the bond and loan markets and premiums at a five year low. With increasing economic performance and corporate confidence improving, we expect companies to pursue their growth ambitions through M&A and forecast global deal volumes to reach almost 30,000 by year-end.
Deloitte UK predicts that the US-led recovery will drive a significant quarter-on-quarter increase in global M&A volumes in Q2 2013.
The US is the main driver behind a recovering M&A market with stronger company fundamentals, a steady decline in jobless claims, rising consumer confidence and a rebound in house prices all contributing to a raft of positive economic data. Corporates in the US are now strategically deploying their cash for growth related initiatives and are expected to push Q2 2013 global M&A deal volumes higher. The projected growth is also supported by record corporate cash piles, accommodative monetary policy and attractive company valuations which are all contributing to favourable dealmaking conditions.
About the Deloitte M&A Index
The Deloitte M&A Index is a forward looking model that forecasts future global M&A deal volumes and reveals the factors influencing dealmaking. By anticipating M&A deal volumes, we hope to help our clients with their growth strategies.
The M&A Index is created from a wide range of weighted market indicators, including macroeconomic and key market indicators, funding and liquidity, company fundamentals and valuation data. Each quarter, these variables are tested for their statistical significance and relative relationships to M&A volumes. As a result, we have a dynamic and evolving model which allows Deloitte UK to identify the factors impacting dealmaking and enables us to make a projection of future M&A deal volumes. The Deloitte M&A Index has a 90 per cent accuracy rate dating back to Q1 2008.
M&A Index H2 2013 ( PDF)