Cross-Border Bulletin: January 2020
Cross-border M&A activity slowed in 2019, with transaction volume for the year decreasing 13% to $829B. Trade tensions and protectionist legislation dampened deal making in the first half of 2019, continuing a trend that began in 2018 with the strengthening of CFIUS and the introduction of tariffs on Chinese imports by the U.S. However, the declining pace of cross-border transactions stabilized in the second half of 2019, buoyed by increased acquiror confidence as global growth remained strong despite recessionary fears. In the second half of 2019, cross-border transaction volume grew 21% year-over-year, driven by a resurgence of mega-deals such as Peugeot’s $32B merger with Fiat and the London Stock Exchange’s $27B purchase of Refinitiv.
As we begin 2020, we expect the tailwinds that bolstered deal making in the latter half of 2019 to persist. Global interest rates remain low with readily available financing, fueling the trend towards larger transactions. “Dry powder” among sponsors has also grown to a record high of $2.4T.
In Vol. V of the Cross-Border Bulletin, we discuss the following:
- Stock Mergers on the Rise
- Record Year for Japanese Activism
- CFIUS Update: Latest Report to Congress Released
- Country Focus: Canada
- Sector Focus: Luxury Consumer Goods