From July to August 2019, Baker Tilly International commissioned Acuris Studios to gauge the opinions of 150 dealmakers on global M&A opportunities, trends and challenges.
Respondents were evenly split and based in Asia Pacific, North America and Europe.
All of them have completed multiple domestic and cross-border M&A transactions-y-mergers and acquisitionsM&A transactions in the past five years.
GLOBAL M&A IN 2019 AND BEYOND
Even amid heightened geopolitical risk and rising protectionism globally, cross-border M&A is set to remain a crucial mainstay of corporates' strategies for growth and development.
These deals, however, may come under greater scrutiny as dealmakers adapt to the headwinds shaping the current market.
The current environment of political and economic uncertainty seems to be having limited impact on corporate and private buyer desires to get deals done.
DEAL DRIVERS
The trade dispute between the US and China continues to have far-reaching effects throughout the global economy, particularly in the M&A marketplace.
Respondents also expect increased competition for the best deals, bolstered by increasing private equity activity and corporate divestments that bring new assets to market.
Respondents say the US-China trade dispute will be the main driver of their future acquisitions, more than many other factors shaping strategies today.
GLOBAL OPPORTUNITIES: KEY MARKETS
Asia Pacific and North America stand out, as respondents expect M&A activity to accelerate given clear market advantages, promising growth rates and the availability of deals.
Asia's developing economies clearly offer attractive opportunities for multinational businesses now looking to step up their growth and to expand into new markets.
Respondents are attracted to North America for its reliable infrastructure, the availability of attractive target opportunities and its political stability and legal certainty.
Nevertheless, dealmakers do have some concerns.
SECTORS IN THE SPOTLIGHT
Technology, media, telecommunications and consumer will be the focus of global M&A as dealmakers look to bolster their digital advantages and tap into new customer groups in developed and emerging markets.
At a sectoral level, more than three-quarters of respondents pick out technology, media and telecoms as likely to be amongst the three most attractive sectors for M&A activity.
GOING GLOBAL: KEY CONSIDERATIONS WHEN COMPLETING CROSS-BORDER M&A
Dealmakers face both big-picture concerns and technical challenges as they pursue cross-border M&A.
Devoting more resources to due diligence and choosing the right advisors might mitigate some of these challenges.
The current market is both challenging and complex, with various factors coming together to create conditions that could see more deals fail than succeed.
Conclusion
On the one hand, while 2019 has seen M&A deal volumes and values slow from the levels recorded in 2018, there is no reason to expect any significant decline in activity over the year ahead.
The vast majority of respondents expect activity to at least be sustained at current levels, including more than half who expect an increase.
There are good reasons for this confidence.
And, on the other hand, the importance of assembling a strong M&A team, with relevant expertise and experience, cannot be understated.
Securing these skills will improve the deal process at every stage, reducing the risk of pursuing inappropriate deals, or suffering the negative impacts as M&A collapses at a late stage of due diligence.