Q4 2014 The Deloitte M&A Index

The Deloitte M&A Index Q4 2014 Mega-deals lead the resurgence in M&A markets Key points Contacts • So far this year, companies have announced $2.5 trillion worth of M&A deals. This Iain Macmillan makes 2014 the best year for deals by value since 2007. This year will go down as Head of UK M&A and New Growth a year when mega-deals (> $10 billion) made a comeback and so far 26 such deals +44 (0) 20 7007 2975 have been announced amounting to $672 billion. [email protected] • We forecast global deal volumes in Q4 2014 to recover and reach around 8,500, which Sriram Prakash will make a total of around 31,500 for the year. Though less pronounced, it represents an Head of M&A increase of 3% over last year and would make 2014 the best year for volumes since 2011. and New Growth Insight +44 (0) 20 7303 3155 • Looking ahead to 2015, following the end of the US quantitative easing programme, [email protected] the pace of the US economic recovery is expected to continue. However other economies, including the Eurozone and many of the emerging markets are facing challenges. These diverging economic trajectories mean that the US companies could take advantage of an appreciating US dollar to pursue cross-border M&A deals. • Globally corporates are in a position of strength, they have record levels of cash reserves, have rebuilt balance sheets, stock market rallies have lifted their share prices and M&A spend as a percentage of market capitalisation remains lower than average. However the conditions for global economic growth remain challenged and with heightened geopolitical risk and investor scrutiny following high-profile deal withdrawals, we expect companies to display patience and consideration while pursing M&A activities in 2015. Figure 1. The Deloitte M&A Index Global M&A deal volumes Q4 2014 9,500 M&A deal forecast 9,000 High: 8,800 8,500 Mid: 8,550 Low: 8,300 8,000 7,500 7,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 Deloitte M&A Index M&A deal volumes (projections) (actuals) About the Deloitte M&A Index The Deloitte M&A Index is a forward-looking indicator that forecasts future global M&A deal volumes and identifies the factors influencing conditions for dealmaking. The Deloitte M&A Index has an accuracy rate of over 90% dating back to Q1 2008.