Optimistic forecasts spur global M&A activities

Bankers are confident that global transaction volumes will exceed the $4 trillion mark next year, the highest level in the past four years. A key driver is the announcements of US President-elect Donald Trump, who promises less regulation, lower corporate taxes, and a generally business-friendly stance. Current data from Dealogic shows that the total value of mergers and acquisitions (M&A) has risen by 15% and now stands at $3.45 trillion, after reaching a decade-low of about $3 trillion the previous year. In the US, a more transaction-friendly antitrust law is expected to facilitate mergers next year. Trump recently appointed Andrew Ferguson as chairman of the Federal Trade Commission, replacing Lina Khan. Ferguson, a member of the Republican Party, is expected to be less stringent in overseeing large corporate mergers. In the United States, M&A volumes rose by 10% to $1.55 trillion, while Europe and Asia-Pacific recorded an increase of 22% and 11%, respectively. Interest rate cuts, an improved financing environment, and an increase in IPOs are reviving private equity firms that have struggled in recent years to sell portfolio companies profitably or take them public. Recent key transactions include Blackstone's $16 billion purchase of Australian data center operator AirTrunk and Silver Lake's $13 billion acquisition of the Endeavor Group. Such transactions highlight the industry's confidence despite uncertainties surrounding Trump's planned tariffs. Investment bankers warn that planned tariffs could burden the economy and fuel inflation. While there is more optimism regarding unlocking deal opportunities, there remains overall caution about potential changes. The technology sector is showing over 20% growth in the M&A area as a leader, but international M&A activity is also being driven by financially strong foreign buyers targeting attractive US assets.