INTERNATIONAL CORPORATE FINANCE EXECUTIVE SUMMARY
Investors are optimistic about M&A acti-
vity in 2016, since it is still one promising
way to bolster a firm’s portfolio and reach
inorganic growth by shortcutting. Pharma
company Shire buying its rival Baxalta for
$32 billion takes the crown, for now. Yet
the statistics aren’t that positive: In Q
2016 five jumbo deals were called off,
including Halliburton taking their $38.
billion bid for Baker Hughes off the table
on the 30th of April (the largest dropped
deal in the history of the oil & gas indus-
try). Global withdrawn M&A in Q1 2016
hit $465.5 billion, the second highest
level since the $505 billion in 2007 and
more than double the amount of the same
period in 2015 ($189.9 billion).Given the uncertainty after the result of
the UK’s referendum on European Union
(EU) membership, the US presidential
election and increasingly tough fiscal re-
gulations worldwide, firms are cautious
and are postponing deal-making activi-
ties. MergerMarket’s report indicates that
global M&A value decreased by 26.8%,
the US suffered a 31.5% decrease, the
EU a 19.3% dip and Asia Pacific a fall of
30.7% in announced value, all compared
to H1 2015. However, German compa-
nies stand out as the deal value towards
UStargets was 70.8% more than H1 2015,
the ongoing $62 billion Bayer-Monsanto
bid is evidence of this trend. Chinese
companies are also dynamic acquirers ofwestern tech firms, such as Midea Group’s
$4.3 billion acquisition of German robo-
tics maker KUKA.The trends not only imply delayed deci-
sion making among investors due to high
market volatility, they also suggest the
changing balance between mature and
emerging markets given the fact that Asia
Pacific is generously injecting large
amounts of cash available for investment
into the EU and the US while inbound
M&A to the region is decreasing. Moreo-
ver, the soaring popularity of Central &
South America, the Middle East and Afri-
ca also echo investors’ intention to diverse
the risk.2016: A Year Full of Uncertainty