The year of 2015 has established itself as a record-breaking year for cross-border M&A post-financial crisis, according to a Cross-Border M&A Index by global law firm Baker and McKenzie. M&A Index is a forward-looking indicator that forecasts future global M&A deal volumes and identifies the factors influencing conditions for deal-making.
Baker and McKenzie said in a press statement Wednesday that the overall M&A in 2015 reached $4.28tn, of which 39% were cross-border in nature at $1.66tn on 5,441 deals, with an increase rate of 17% on value over the prior year. The statement said the value of cross-regional deals targeting the Middle East increased significantly over the last year as did the Middle East Index for Q4 of 2015 is 546.5. It was a massive increase on Q4 2014 of 154.1 and far exceeding the previous record of 344.9 set in Q3 2012.
Cross-regional deals targeting the Middle East totalled 80 deals valued at $9.73bn in 2015. The UAE was featured as the target country for three out of the top five M&A deals into the region. The Computer Software sector was the top target industry in the Middle East by both volume and value, with 23 deals exceeding $2bn in value.
According to Outbound Middle East M&A, cross-regional deals fuelled by the Middle East totalled 105 deals valued at $76.35bn, with the UAE driving two of the top five outbound deals. The top sector for outbound M&A by value was the Pharmaceutical sector with four deals valued at $46.02bn, while the Computer Software sector led by volume with 9 deals valued at $90m.
“Full year cross-border deals included $1.06tn in cross-regional deals, up 7% and $595bn in intra-regional deals, up 40%. Deals between the EU and North America account for 76% of all cross-regional activity by value,” the statement said. ”While the Industrials sector led by volume with 195 cross-border deals globally, with $219.2bn in the Healthcare sector and $152.8bn in Consumer sector.”
The Index, which analyses the number, size, and complexity of cross-border deals, stands at 331 for quarter four (Q4) of 2015, well ahead of the prior quarter’s 254 compared to 278 in Q2 of 2014.