Asia-Pacific predicted to continue to dominate M&A activity In H2 2018

Intralinks has issued its Deal Flow Predictor for the fourth quarter of 2018.

In the second half of the year, growth in the global number of announced deals will resume (after a first-half pause) at roughly 7% year over year. The strongest growth in announcements will come from technology (Intralinks calls this the TMT sector because tech includes media and telecoms), as well as real estate and industrials.

When 2018 wraps up, there will have been a global total of 53,000 announced deals.

Geographically, it is the Asia-Pacific region that will dominate in the forecasted announcements. In the first half, APAC was the only region to show any growth in the number of deal announcements. In the second half, Intralinks forecasts, 94% of the growth worldwide will come from APAC.

Intralinks has noted increasing early-stage activity in Asia in the energy & power sector, TMT, and materials. Within the vast APAC region, one can single out Japan, India, China, South Korea, and Taiwan as playing the largest parts in the M&A growth.

Intralinks also looks into the question: how long does due diligence take? It's critical for the arbs to keep on top of this subject: since trading, like comedy, is a matter of getting the timing right.

Worldwide, in the second quarter of 2018, the average time taken to complete due diligence was about 3% longer than it had been in the first quarter, rising to 179 days. Looked at regionally: North America consistently has the longest due diligence periods in the world, consistently above 180 days and sometimes rising above 200. APAC has the shortest due diligence periods. In Q2 2018, its average was below 120 days.

In its discussion of the issue of the valuation of M&A deals, Intralinks relies largely on Thomson Reuters data. TR data indicates that globally such deals involved a value of $2.5 trillion during 1H 2018, which was an increase of 61% from 1H 2017. This was also the strongest first half for global M&A since such numbers have been totaled: that is, since at least 1980.