Cross-border M&A march continues
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Cross-border M&A march continues

New survey reveals that companies will continue to look overseas for deals for the foreseeable future

While economic headwinds have buffeted the markets in Q1 2016, the majority of businesses are still looking to pursue international deals. According to Herbert Smith Freehills’ new M&A report Beyond Borders, 86% of respondents are looking to do at least one deal. Out of those, 88% say at least one deal will be cross-border and 41% expect to do multiple cross-border deals.

Despite market volatility, the survey reveals that corporates see M&A as the priority route to growth. When it comes to the main facilitators for those deals, the ease with which businesses are able to raise funds is the single most important factor. More than half the respondents (53%) identified this, though other factors are also important – notably industry consolidation (39%). 

However, it is unlikely that deals will be spread evenly across all sectors. M&A spikes are often found in particular industries and this is likely to continue into 2016. “In the pharmaceutical industry, there was a rush to do inversion deals, in part because of the reduction of the tax burdens which US companies could achieve,” says Stephen Wilkinson, global head of M&A at Herbert Smith Freehills in London. “More recently, we’ve seen industry consolidation and the move towards quad play as a strategic driver of deals in the telecommunications, media and technology (TMT) space in Europe.”

Interestingly, given the appetite for distressed assets, the energy and mining sector could see a hike in M&A volume after a lukewarm 2015, particularly if prices stabilise.

Contact our experts

Stephen Wilkinson
Global Head of M&A
Tel: +44 20 7466 2038
Email: stephen.wilkinson@hsf.com

Roddy Martin
M&A Partner (UK/US)
Tel: +44 20 7466 2255
Email: roddy.martin@hsf.com

Nicola Yeomans
M&A Partner (Asia)
Tel: +65 68688007
Email: nicola.yeomans@hsf.com

Andrew Rich
M&A Partner (Australia)
Tel: +61 2 9225 5707
Email: andrew.rich@hsf.com

Frédéric Bouvet
M&A Partner (EMEA)
Tel: +33 1 53 57 70 76
Email: frederic.bouvet@hsf.com

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BEYOND BORDERS: THE FUTURE OF DEALMAKING

After a record-breaking year for M&A last year, the start of 2016 has been more uncertain with the slowdown in the Chinese economy, depressed commodity prices and falling stock markets coupled with Eurozone instability all causing uncertainty in the global economy. However, despite these uncertainties, our two separate surveys, conducted in late 2015 and updated in 2016, demonstrate that the short to medium-term outlook for M&A as a priority focus for capital allocation by corporates remains extremely robust.

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