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Global M&A deals reached $1.5 trillion in the first half of 2024, as a surge in U.S. takeovers and an increase in megamergers offset a declining number of acquisitions.
The value of closed deals was 22 percent higher than a year earlier, according to mid-year data collected by the London Stock Exchange Group, driven by a 70 percent increase in major deals worth more than $10 billion.
But the total number of deals fell 25 percent to a four-year low, with acquisitions worth $500 million or less – the smaller acquisitions that form the backbone of the deal market – falling 13 percent in value.
“This year is much better for M&A than last year,” said Anu Aiyengar, global head of mergers and acquisitions at JPMorgan. “But that’s a low bar, because last year was a tough year.”
The tentative recovery comes after M&A activity fell to a decade low in 2023 as yields rose from the ultra-low levels that fueled a pandemic-era deal boom. But it remains vulnerable.
A senior European banker said: “There are consumer concerns, there are election concerns, interest rates haven’t fallen as quickly as people had hoped. All that creates more volatility.”
The US was a driver of activity in the first half of this year, with deal value rising 43 percent to $796 billion, more than half the global total and the country’s largest share of the global market since 2019.
European dealmaking kept pace, rising 43 percent in value, while the Asia-Pacific region fell 21 percent.
Key deals in the second quarter included US oil and gas producer ConocoPhillips’ move to buy its smaller rival Marathon Oil for $22.5 billion, the latest in a series of partnerships in the Permian Basin fueled by Chevron’s acquisition of rival Hess.
Meanwhile, the Abu Dhabi National Oil Company is nearing a €14.4 billion deal to acquire German chemicals group Covestro, after raising its bid this month.
According to the report, energy deals rose 27 percent this year to $254 billion, the top sector behind technology.
Yet a rebound in major deals has not been enough to fully take M&A out of the post-Covid-19 doldrums, with deal volumes in the three months to the end of June on track to be below average for the eighth consecutive quarter to remain at $1 trillion.
While deals in the middle market continued at a slower pace, financial services emerged as a bright spot for transactions, with deal volume in the sector rising 60 percent from the same period last year, buoyed by Capital One’s agreement in February to acquire rival Discover Financial for $35.3 billion.
Investment bankers and lawyers advising on deals said major companies were increasingly willing to approach potential targets as the macroeconomic environment began to stabilize and as they grew more impatient to pursue their long-term plans.
Not every approach was successful; Australian miner BHP’s attempt to acquire Anglo American, for example, failed in May after a frenzied six-week pursuit.
“Major strategic parties have been waiting to move forward with a long-term plan,” said Ben Wilson, a senior managing director at Guggenheim Securities’ mergers and acquisitions group. “And there are fewer pitfalls.”
Private equity-backed mergers and acquisitions, a focus for dealmakers, rose 40 percent in the first half of the year as buyout investors sit on a record number of assets they need to sell to generate returns for their backers.
Larger banks such as Goldman Sachs, JPMorgan and Morgan Stanley increased their share of the M&A advisory fee market to about 35 percent of the global total, although this remained slightly less than the boutique banks led by New York’s Centerview Partners.
Goldman Sachs was the leading financial adviser on mergers in the first half of the year, with leading positions in the US and Europe.
This article has been updated to correct the name of Hess’s acquirer