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M & A In 2018 Case Analysis

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M&A in 2018: What will characterise the transactions? M&A activity has been on an upward trajectory in the past few years. In 2015, the activity reached a record-breaking $4.3 trillion worldwide. Although activity has since slowed slightly, deal sizes are hanging on – it’s been the seller’s market. So, what are the predictions for 2018? The M&A climate in 2017 has witnessed challenges in capital deployment. While the availability of capital is at record-breaking levels, the industry is stifled with heightened valuations and competition. Deal flow has been constrained and led to limited number of deals with impressive deal valuation. Baker & McKenzie’s report from 2018 predicted the global M&A to peak this year in developed markets, with …show more content…

The Baker & McKenzie report predicts the technology sector to drive M&A deals. According to their data, the sector’s deals could reach $415 billion by next year, which would be the highest level since 2000. Michael J. Grossman from RSM US LLP has also pointed out to the strength in the technology sector’s growth – especially in terms of cross-sector deals. Fintech and technology in the automotive sector have had a strong year. The Baker & McKenzie report also predicts healthcare to continue to attract mergers and acquisition. However, this could change depending on what happens in the US healthcare market regarding the continuous effort to repeal and replace the Affordable Healthcare Act. North America to maintain its top spot In terms of the regional trends, North America’s control over M&A deals seems to continue into 2018. The expectation is largely based on the new administration adopting pro-business policy agenda and there are hopes the tax reforms might incentivise deal-making in the US. But the situation is still unclear and could mean a different outlook for M&A. Thomas Vaughn, co-leader of Dykema’s M&A practice said, “We are still hearing that uncertainty around the Trump administration’s priorities and regulations will have the greatest impact on M&A from a global perspective”. In terms of Europe, much depends on the Brexit negotiations. According to Baker & McKenzie, an amicable separation would only have a minor impact with a forecast of

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