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Global M&A deals reached $1.5 trillion in the first half of 2024, as a surge in US acquisitions and an increase in mega-mergers offset declining acquisitions.
The value of deals closed was 22 percent higher than a year earlier, according to half-yearly data compiled by the London Stock Exchange, driven by a 70 percent increase in large deals worth more than $10 billion.
But the total number of deals fell 25 percent to a four-year low, with acquisitions of $500 million or less — the smaller takeovers that form the backbone of the deal market — down 13 percent in value.
“This year for mergers and acquisitions is much better than last year,” said Anu Aiyengar, global head of mergers and acquisitions at JPMorgan. “But that’s a low bar because last year was tough.
The tentative recovery comes after M&A activity fell to a 10-year low in 2023 as interest rates rose from the ultra-low levels that fueled the pandemic-era deal boom. But she remains fragile.
One senior European banker said: “There are consumer concerns, election concerns, rates have not come down as quickly as people had hoped. All of this brings more volatility.”
The US was the engine of activity in the first half of this year, with the value of trade rising 43 percent to $796 billion, more than half of the global total and the country’s largest share of the global market since 2019.
European trading kept pace, growing by 43 percent in value terms, while the Asia-Pacific region fell by 21 percent.
Among the biggest deals to advance in the second quarter was U.S. oil and gas producer ConocoPhillips’ move to buy its smaller rival Marathon Oil for $22.5 billion, the latest in a series of ties in the Permian Basin sparked by Chevron’s acquisition of rival Hess.
Meanwhile, Abu Dhabi National Oil Company is closing in on a €14.4bn deal to take over German chemicals group Covestro after boosting its proposed bid this month.
Energy deals rose 27 percent to $254 billion this year, the top sector behind technology, according to the report.
Still, the increase in large deals was not enough to fully shake M&A activity out of the post-Covid-19 slump, with deal volumes in the three months to the end of June remaining below $1 billion for the eighth consecutive quarter.
While middle market deals continued at a slower pace, financial services emerged as a bright spot for deals, with deal volume in the sector up 60 percent year-over-year, boosted by Capital One’s February deal to acquire rival Discover Financial for 35, 3 USD. billion CZK
Investment bankers and lawyers advising on the deals said major companies were increasingly willing to approach potential targets as the macroeconomic environment began to stabilize and as they became impatient to continue with their long-term plans.
Not every approach has been successful – for example, Australian miner BHP’s £39bn bid to take over Anglo American collapsed in May after a frantic six-week pursuit.
“The grand strategies were waiting to proceed with a long-term plan,” said Ben Wilson, senior director of mergers and acquisitions at Guggenheim Securities. “And there are fewer trap doors.
Private equity-backed M&A targeting dealers rose 40 percent in the first half of the year as buyout investors have a record number of assets to sell to generate returns for their backers.
Bigger banks such as Goldman Sachs, JPMorgan and Morgan Stanley increased their share of the M&A advisory fee market to about 35 percent of the global total, though that remained slightly less than boutique banks led by New York’s Centerview Partners.
Goldman Sachs was the top financial adviser for mergers in the first half of the year, leading in the US and Europe.
This article has been amended to correct the name of the acquirer of Hess