There were more mergers and acqusitions (M&As) in 2010 compared to 2009, although the growth rate seems to have been slowing towards the end of the year.
The IntraLinks Deal Flow Indicator (DFI), released yesterday, reports a 33% increase in global M&A deal activity in 2010 from 2009. In Q4 2010, global deal activity was up 20% compared to Q4 2009 but decreased by 3% versus Q3 2010 following six consecutive quarters of growth.
The IntraLinks Deal Flow Indicator found that there was a significant increase in M&A deal activity during 2010 throughout all regions but particularly in the emerging markets. Asia-Pacific (65% increase in 2010 compared to 2009) and Latin America (55%) were followed by Europe/Middle East/Africa (33%) and North America (26%).
The upsurge in global M&A deal activity is illustrated by the 2010 deal flows exceeding the numbers from early 2008.
The overall positive trends for 2010 are consistent with the following factors in the marketplace:
* Continued equity market stability;
* Favourable interest rate environment;
* Cash/capital stockpiles driving corporate buyers and resurgence in financial sponsor activity;
* Corporate growth that can only be achieved through M&A deals; and
* Macroeconomic drivers such as need for natural resources.
"It's very encouraging to see the sizeable growth in M&A deal activity in 2010," says Matt Porzio, vice-president: M&A product marketing at IntraLinks. "Based on the overall trending, there is a strong possibility of additional momentum throughout 2011, particularly in Asia-Pacific and Latin America where the number of intra-regional emerging market deals is expected to grow at an accelerated rate."
The IntraLinks Deal Flow Indicator shows that global M&A deals increased in the telecom, media, consumer and energy industries in Q4 2010 compared to Q3 2010. There were decreases in the real estate, industrials, life sciences and technology sectors during that same period.