| In 2007, companies completed more than 12,000 M&A deals globally, with values totaling over $3.5 trillion.1 But those volume and dollar records have since been buried under years of bad news. Dykema’s 2012 Mergers & Acquisitions Outlook Survey indicates that the mortgage meltdown, the recession, the European debt crisis, the aftereffects of the presidential election and now the “fiscal cliff” have pushed expectations for 2013 to a near record low. The current year is on pace to be the slowest for M&A since 2009: through the first three quarters of 2012, volume is projected around 5,000 deals, and aggregate valuation is currently estimated at $1.5 trillion, significantly less than the 2007 figure.2 Not surprisingly, survey respondents expressed many reservations about the year to come: a solid third predicted a negative U.S. economy, and a fifth anticipated a weaker M&A market.
Yet in this eighth annual survey, there are glimmers that may point to an eventual return to more robust deal-making markets. This survey, which polled respondents from November 7 to November 20, 2012, is designed to measure the perspectives of leading company executives and outside advisors on the direction of the M&A market in the coming year. More than half of the respondents expected to be involved in at least one transaction in the coming year, so they have good reason to keep a close watch on this market.
A telling pattern emerged, with more respondents than in the previous year predicting a strengthening of the U.S. economy and a strong U.S. M&A market. M&A may have hit another bottom; there could be headroom next year. In written comments, respondents predicted that once the shocks currently buffeting the economy are dealt with, the economy and the attendant M&A market may be spring-loaded for more activity. A more detailed report of our findings is contained in the following pages. We hope you find this information insightful and informative. We plan to periodically reexamine these matters to keep you informed about opportunities and challenges of importance to you, our clients and friends.
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