Energy, mining and utilities mergers and acquisitions (M&As) dropped slightly to 166 billion USD at a global level in the first half (H1) of 2016, according to a Clifford Chance report received by energynomics.ro.
“Global M&A has stalled in the first half of 2016 with deal values down to their lowest levels in three years. Against a backdrop of geo-political change and uncertainty, many investors and bidders have adopted a more cautious outlook to growth. The outcome of the UK’s referendum on leaving the European Union has further impacted sentiment, sending shockwaves through the global financial markets. The upcoming US presidential elections will only serve to heighten the uncertainty and volatility in the markets over the coming months and neither is helpful in an M&A context,” says Guy Norman, Global head of Corporate division, Clifford Chance.
In the energy, mining and utilities field, the M&As have dropped 4%, while industrial and chemical companies deals went up 10% to 244 billion USD, with healthcare on third position, up 2% to 164 billion USD during the H1 2016, as compared to last year’s similar period.
“While European M&A by value is down year on year for the first half of 2016 there are opportunities to be found in the market turmoil. Globally private equity firms are sitting on large amounts of available cash, much of which recently raised, and the current climate will suit US$ denominated firms and sovereign wealth funds investing in the UK and Europe, who will look to take advantage of depressed currencies. Although the impact of the Brexit referendum on UK financial services will play out over time, we may see some divestments of non-core assets,” says also Mark Poulton, head of Corporate division, London.
