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Global M&A figures: Where the Australian market fits in
New figures indicate where each country’s mergers and acquisitions market fits into the global shares, with Australia inching closer to the top.
Naomi Neilson
Data from Mergermarket revealed global M&A activity during 2019 was down 6.9 per cent from 2018, indicating there is a significantly slower deal-making market. Australia, however, reached record levels of investments.
The past year recorded 38 megadeals worldwide, which has been recorded as the highest number of such deals since 2015. However, hampered by a “sluggish” eurozone and Brexit, European M&A activity has suffered from a lack of “big-ticket” deals.
Global editorial analytics director Beranger Guille noted in the report: “On the back of the longest equity market in history, and amid persistently low interest rates, corporate and private equity firms have cash reserves and appealing debt financing options.”
M&A activity in the Asia-Pacific region recorded US$565.3 billion across 3,735 deals in 2019, the lowest value since 2013 and smallest deal count since 2014. Market share shrank to 20.4 per cent in 2018 to 17 per cent in 2019.
China and Hong Kong, the largest contributor to M&A activity in Asia, have seen global market shares shrink from 11.4 per cent to 8.8 per cent over the same period.
This was attributed to the increased “geopolitical tensions between the US and China” and more than six months of anti-Beijing protests in Hong Kong.
“Inbound and outbound deals have equally been hurt, reaching levels not seen since the beginning of the decade. Deals with US-based players were particularly difficult.”
Despite tensions across the globe, and being led by Asahi Group’s US$11.3 billion takeover of Australian brewery Carlton & United Breweries, Australia received a record level of Japanese investment, making it the second most favourable destination for all future Japanese investors behind the US, with 20 deals worth US$16.4 billion.
The US, together with Australia, accounted for 61.7 per cent of total Japan outbound deal values. In addition, India, with US$3.5 billion across 23 deals in 2019, may see a pickup in Japan’s interest going forward in the M&A market.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
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