Headlines

  1. Cross-border M&A made up 31% of all deal value and 35% of all deal volume in Q2 2016, compared to 37% and 30% for the same period in 2015
  2. Uncertainty in the lead up to the EU referendum hit UK M&A, with Q2 2016 outbound deal values down 82% and inbound deal values down by 89% on Q2 2015
  3. Chinese bidders continued to drive values in Q2 2016, with 97 outbound deals worth US$40.7bn – 23% and 132% higher than
    the same period in 2015

On the global M&A stage, all eyes were on the UK’s EU referendum. Cross-border M&A volumes involving the UK remained relatively steady throughout the second quarter of 2016, with 128 outbound deals and 144 inbound (compared with 149 and 126 respectively in the same quarter of 2015).

But values were a different story: Q2 2016 outbound deals were worth only US$12.1bn, down 82% on Q2 2015, while inbound deal values fell by 89% from US$118.3bn to just US$12.9bn.

Cross-border dealmaking hesitancy was also felt in the US. While it remained the most active outbound M&A market in Q2 2016 by volume, with 261 outbound deals worth US$31.2bn, volume and values were down 19% and 40% respectively, compared with the same period in 2015. Only FMC Technologies’ all share merger of equals with Technip in France, worth US$4.6bn, made the list of top ten deals for the period.

Inbound US M&A activity remained consistent with 214 deals, compared with 204 deals in the same period in 2015, but values took a hit – down 47% on Q2 2015, at US$46.9bn. Nonetheless, five of those inbound deals were in the top ten for Q2 2016, worth a total of US$18.1bn.

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Great haul of China
In a continuation of a trend identified in the Q1 2016 Baker McKenzie Index, Chinese bidders drove values, providing the key highlight in global cross-border M&A in Q2 2016. China’s 97 outbound deals in Q2 were worth US$40.7bn – 23% and 132% higher than the same period in 2015. The focus was on investments in technology (15 deals worth US$17.0bn) and industrials (17 deals worth US$4.8bn) – part of the country’s ongoing efforts to move up the value chain. China also demonstrated a renewed interest in mining (four deals worth US$4.4bn).

Chinese buyers shifted their attention to the EU for targets, with 43 deals (compared with 23 in wider Asia Pacific and 19 in North America).

The largest of these included Chinese industrial products and services company Midea Group’s takeover offer for German-listed KUKA, an industrial automation company worth US$4.3bn, as well as private equity firms JAC Capital Management and Wise Road Capital Management’s acquisition of Dutch-based NXP Semiconductors’ Standard Products unit for US$2.8bn.