Deal-making depends on confidence in boardrooms. With equity markets appearing to falter, and the US in danger of starting a global trade war, you might expect CEOs to be sitting on their hands. Yet the mergers and acquisitions (M&A) frenzy of the past few years just keeps going. In the first half of 2018, the value of global M&A reached $2.5trn, a 65% jump on the same period last year and a first-half record. The US media and telecoms sectors led the charge.
M&A has looked healthy all over the world, however, as Ben Dummett points out in The Wall Street Journal. Europe registered a 58% annual rise in dealmaking. Companies continue to seek out new sources of growth and cut costs despite the increasingly uncertain environment.
UK M&A, moreover, is looking especially sprightly despite "messy European Union divorce talks". The value of deals involving a British firm more than doubled to an 11-year high of $366bn in the first half. Cross-border tie-ups such as Comcast and 21st Century Fox bidding for Sky have hogged the limelight, but it's not just a case of foreign firms wanting to scoop up a bargain thanks to the weak pound. British domestic consolidation and cost-cutting are also key drivers. Our M&A scene, concludes Morgan Stanley's Colm Donlon, has been unexpectedly "robust".
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