The Deloitte M&A Index Q4 2015 2016: Opportunities amidst divergence | 3 Key points • We are expecting 2015 to end with over $4 trillion worth of deals Record-breaing deal alues making it the highest for deal values since 2007. However, on a last- $  trillion ­15 twelve-months (LTM) basis, there was a slowdown in the volume of $3.3trilliion ­1 transactions in the second half of 2015. $1trillion of cross-border deals • Cross-border deals are a major feature of this M&A wave. More than emergence of $1 trillion worth of cross-border deals have been announced so far new corridors this year, of which a third were in the vibrant deal corridor between North America and Europe. In addition, new corridors have started 1/3rd of emerging between Asia and Europe, led by China and Japan, and are cross-border likely to continue in 2016. deals are between N. America and Europe • Our analysis shows that companies are committing to deliver €e si‚e of te integration pri‚e annualised cost synergies that represent, on average, 3-4% of the transaction value. If all announced cost synergies are realised and Realising all cost sustained, they could add an estimated $1.5-1.9 trillion to the value synergies could up to of these companies. Therefore delivering these synergies will be high add an estimated $1.5-$1. $1.5-1. trillion on boardroom agendas. to alue of trillion companies • The threat of disruptive innovation is impacting the traditional products and markets of many companies. In response they are ƒ„A opportunities amidst diergence launching venture funds to seek and invest in new sources of innovation, which could lead to smaller, but more strategic deals. • As this record-breaking year draws to a close, concerns over global Economic growt ƒonetary policy growth are back, along with divergence in economic and monetary policies. Looking ahead, we expect such divergence to create M&A opportunities and define dealmaking in 2016. …orporate performance …urrency fluctuations Figure 1. The Deloitte M&A Index lo al M&A deal volumes Q4 2015 M&A 12000 deal orecast 11500 Ši‹„€ 11Œ00 Mid€ 1100 11000 ˆo‰€ 11000 10500 10000 500 000 500 Q Q4 Q1 Q2 Q Q4 Q1 Q2 Q Q4 Q1 Q2 Q Q4 Q1 Q2 Q Q4 Q1 Q2 Q Q4 201020102011201120112011201220122012201220120120120120142014201420142015201520152015 Deloitte M&A Index (projections) M&A deal volume (actuals) ˆast t‰elve mont„s deal volumes Q4 2015 M&A 45000 deal orecast 40000 5000 Q Q4 Q1 Q2 Q Q4 Q1 Q2 Q Q4 Q1 Q2 Q Q4 Q1 Q2 Q Q4 Q1 Q2 Q Q4 20102010 2011 201120112011201220122012201220120120120120142014201420142015201520152015 ­ource€ Deloitte anal‚sis ased on data rom ƒ„omson …ne †an‡er