Global M&A Hits 2,079 Trillion Won in First Half... Led by US and Big Deals

Global mergers and acquisitions (M&A) deals in the first half of this year totaled $1.5 trillion (approximately 2,079 trillion KRW). Although the number of deals decreased, the scale grew, showing signs of recovery.

According to data compiled by the London Stock Exchange Group on the 27th (local time), the value of M&A deals completed in the first half of this year increased by 22% compared to the same period last year. This was due to a 70% increase in big deals worth over $10 billion (approximately 13.862 trillion KRW) during this period.

[Image source=Reuters Yonhap News]

The number of deals fell by 25%, marking the lowest level in four years. Deals worth less than $500 million (approximately 693.1 billion KRW), which form the core of the M&A market, decreased by 13% in terms of value.

Anu Iyengar, Global Head of M&A at JP Morgan, said, "This year is much better than last year. However, last year was a tough year, so the baseline is low."

Due to rising interest rates, M&A activity last year dropped to its lowest level in a decade. Although there was a rebound this year, uncertainty remains high. A senior European banker commented, "There are concerns about consumers and elections. Interest rates have not fallen as quickly as people expected. All of this brings more volatility."

The recovery in M&A in the first half of this year was led by the United States. U.S. deal value increased by 43% year-on-year to $796 billion (approximately 1,103 trillion KRW), accounting for half of the global total. Deal value in Europe rose by 43%, while the Asia-Pacific region saw a 21% decline.

According to the report, energy sector deals, which hold the largest share within the technology field, increased by 27% this year to $254 billion (approximately 325.0948 trillion KRW). Notable examples include ConocoPhillips, a U.S. oil and gas producer, acquiring Marathon Oil for $22.5 billion (approximately 31.1895 trillion KRW).

However, some argue that the increase in big deals is not enough to completely change the M&A market landscape, which has been sluggish since the COVID-19 pandemic.

Investment banks (IB) and transaction advisory lawyers assessed that as the macroeconomic environment begins to stabilize, large corporations are becoming more eager to pursue long-term plans, strengthening their willingness for M&A.

Private equity-backed M&A increased by 40% in the first half of this year.