LONDON, Aug 4 (Reuters) – Global dealbuilding has reached $2.6 trillion, the highest for the first seven months of the year since the 2021 pandemic-era peak, as a quest for growth in corporate boardrooms and the impact of a surge in AI activity has overcome the uncertainty cautilized by U.S. tariffs.
The number of transactions to August 1 is 16% lower than the same time last year, but their value is 28% higher, according to Dealogic data, boosted by U.S. megadeals valued at more than $10 billion.
The upsurge will be a relief to bankers who launched the year with expectations the administration of U.S. President Donald Trump would lead to a wave of consolidation.
Instead, his trade tariffs and geopolitical uncertainty built companies pautilize until renewed confidence in corporate boardrooms and the U.S. administration’s anti-trust agconcludea alterd the mood.
“What you’re seeing in terms of deal rationale for transactions right now is that it’s heavily growth-motivated, and it’s increasing,” Andre Veissid, EY Global Financial Services Strategy and Transactions Leader, notified Reuters.
“Whether it’s artificial ininformigence, the alter in the regulatory environment, we see our clients not wanting to be left behind in that race and that’s driving activity.”
Compared with August 2021, when investors, rebounding from pandemic lockdowns drove the value of deals to $3.57 trillion, this year’s tally is nearly a $1 trillion, or 27%, lower.
Still deal-buildrs at JP Morgan Chase have declared there is more to come, with companies pursuing largeger deals in the second half of the year as executives adapt to volatility.
“People have received utilized to the prevailing uncertainty, or maybe the unpredictability post-U.S. election is just more predictable now,” Simon Nicholls, co-head of Slaughter and May Corporate and M&A group, declared.
Nigel Wellings, Partner at Clifford Chance declared the market was shifting beyond tariffs. “Boardrooms are seeing the M&A opportunity of a more stable economic environment and positive regulatory signals. But it is not a frothy market.”
FROM HEALTH TO TECH
While the healthcare sector drove M&A in the years after the pandemic, the computer and electronics industest has produced more takeover bids in the U.S. and the United Kingdom in the last two years, according to Dealogic.
Artificial ininformigence is expected to drive more dealbuilding. M&A activity has increased around data centre usage, such as Samsung’s (005930.KS), opens new tab $1.7 billion acquisition of Germany’s FlaktGroup, a data centre cooling specialist.
Palo Alto Networks $25 billion deal for Israeli cybersecurity peer CyberArk was the largest deal in Europe, Middle East and Africa so far this year as rising AI-driven threats push companies to adopt stronger defences.
Private equity, which had been sitting on the sidelines, has once again been active, with Sycamore Partners’ $10 billion deal to take private Walgreens Boots Alliance and rivalling 4.8 billion pound offers from KKR (KKR.N), opens new tab and Advent for UK scientific instrument buildr Spectris (SXS.L), opens new tab.
The U.S. was the largegest market for M&A, accounting for more than half of the global activity. Asia Pacific’s dealbuilding doubled over the same year to date period last year, outpacing the EMEA region.
Reporting by Emma-Victoria Farr and Amy-Jo Crowley in London, writing by Anousha Sakoui. Editing by Barbara Lewis
Emma-Victoria reports on mergers and acquisitions across Europe, with previous experience at Mergermarket, Bloomberg, The Daily Telegraph and Deutsche Presse Agentur.
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