27 Apr 2020
Posted in Business Fundamentals
Global M&A activity started plummeting as Q1 2020 approached the end
The global mergers and acquisition (M&A) deal volume and value started declining with the first quarter (Q1) of 2020 approaching the end, according to GlobalData, a leading data and analytics company.
The number of announced M&A deals decreased from 2,349 in February 2020 to 1,984 in March 2020, whereas the corresponding deal value also decreased from US$151.2bn to US$129.9bn.
All regions witnessed a decline in deal volume and value except for the Asia-Pacific (APAC) and South and Central America, which witnessed growth in deal value.
Aurojyoti Bose, Lead Analyst at GlobalData comments: “Although in terms of value, the APAC and South and Central America regions showcased growth in Q1 2020, it was only due to these regions witnessing the announcement of one high-value deal each. The announcement of an acquisition of Tesco’s operations in Thailand and Malaysia by Charoen Pokphand for US$10.6bn raised the total value for the APAC region while the announcement of acquisition of PartnerRe by Covea for US$9.05bn soared the deal value for South and Central America during March. Excluding these, the deal value in these regions also declined.”
The number of M&A deals worth more than or equal to US$100m decreased to 96 in March 2020 against 168 deals in February 2020. In the North America, Europe, APAC, Middle East and Africa, and South and Central America regions, the number of deals worth more than or equal to US$100m deals decreased from 66, 47, 40, seven and eight, respectively, in February 2020 – to 29, 23, 37, two and five deals in March 2020, respectively.
Bose adds: “The subdued activity could be attributed to the cautious approach of acquirers towards making big investments amid uncertainty amid the COVID-19 outbreak.”
Of all regions, North America topped accounting for 45.5% and 44.46% of global deal value and volume in Q1 2020, respectively. The M&A deals volume in the North America region decreased from 1,024 in February 2020 to 820 in March 2020, whereas the corresponding deal value also decreased from US$69.6bn to US$60.5bn.
The European, APAC, Middle East and Africa, and South and Central America regions recorded 29.5%, 20.57%, 2.74% and 2.69% of global deal volume, respectively. While in terms of deal value, the European, APAC, Middle East and Africa, and South and Central America regions recorded 26.05%, 21.62%, 3.85% and 2.98% respectively.