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.
Key Findings
- 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.”
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