US dealmakers expect mergers and acquisition activity in America to fall in 2016, as worsening market conditions are set to end a two-year bull run of mega deals, an annual M&A survey from Brunswick has showed.
Out of more than 100 M&A advisers who participated in the survey, 70 per cent project deal activity in the US to drop compared with 2015, which hit an all time record of about $5tr worth of transactions, report James Fontanella-Khan and Arash Massoudi.
Globally, most dealmakers forecast business to stay at similar levels to 2015, partly energised by more takeovers by European and Asian companies.
With about $494.5bn worth of deals announced around the world so far this year, overall activity is down 18 per cent, according to Thomson Reuters data. Dealmaking in the US has fallen 25 per cent to $220bn, while in Asia, excluding Japan, the total value in transactions has dropped 40 per cent to $103bn.
The only bright spot, after a prolonged negative period, was Europe, where total deal volumes are up 24 per cent to $150bn.
“Following an unprecedented year for deals in 2015, US dealmakers are concerned the M&A party may be over,” said Steven Lipin, US senior partner at Brunswick. “US M&A practitioners have tempered expectations and see a steady flow of smaller deals driving deal activity instead of the mega deals that we saw in 2015.”
Dealmakers were divided over who would be the best US president to help boost M&A activity.
Donald Trump, the New York property developer and frontrunner for the Republican nomination, received the backing of 22 per cent of US-based dealmakers, a percentage point higher than Hillary Clinton, the Democratic Party favourite.