March 18, 2019
Refinitiv Deal Makers Sentiment Survey Reveals a Cautious Optimism for M&A and Capital Markets in 2019
- Survey of deal making professionals reveals a less optimistic 2019 amongst turbulent markets for deal making, expecting a 0.2% drop in global M&A activity
- Fears of recession and the impact of protectionist policies top the list of concerns among dealmakers for 2019 due to Eurozone GDP worries and US/China trade wars.
- 62% of respondents feel that Brexit will make UK companies less attractive acquisition targets.
LONDON/NEW YORK – Refinitiv has announced the findings of its annual Deal Makers Sentiment Survey conducted by Greenwich Associates, providing a broad and deep quantitative assessment of M&A-related and Capital Markets activity in the year ahead across all major sectors and geographies.
Overall deal makers are expecting a virtually flat market in 2019 with a 0.2% drop in global M&A deal volume. Dealmakers in Asia-Pacific are most optimistic, predicting growth of 2.4%, and those in EMEA are the most pessimistic expecting a roughly 2.0% decrease.
The report is based on a survey of 470 M&A and capital markets professionals and business executives across 53 countries, conducted between November 2018 and January 2019.
- 69% of participants agreed that pressure to keep up with competitors and fears of a market downturn were the top considerations when looking at potential drivers and objectives behind future M&A activity. Deal makers in EMEA are more concerned about changing US trade policy and those in the Asia-Pacific region expect Private Equity activity to have more impact.
- Top M&A objectives for corporates in 2019 include expanding scope of product offerings (50%), acquiring a high-growth business (40%), and expanding geographical presence (37%).
- Only 40% of businesses expect to increase their Capital Expenditure in 2019, compared to almost twice that the previous year (74%),
- The most popular sectors for expected M&A growth were in Healthcare and Energy, Power & Commodities, with industrial and Real Estate being the least popular.
- The impact of Brexit and stagnant growth in the Eurozone is also having an impact on deal-makers market expectations, with 62% agreeing Brexit will make UK companies less attractive acquisition targets, and an expected decrease in M&A activity in Europe of 2.1%.
“With the macroeconomic landscape changing over the last twelve months, the risks to deal-making have become clearer” says Matthew Toole, director of Deals Intelligence at Refinitiv. “Trade tensions in the US, political upheaval in Europe with Brexit and increasing protectionism on a global scale are having an effect on sentiment in the M&A market. As we enter the sixth year of the most recent cycle for deal making, it is clear that expectations are muted as levels of confidence shift around the world.”
To download the full report, please visit our website.
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