November 15, 2019//-Total technology industry M&A deals worth $82.77bn were announced in the second quarter of 2019. So far in 2019, global M&A deals have been worth a total of $178.02bn, marking a decrease of 19.7% year on year says, GlobalData’s Verdict.co.uk.
GlobalData’s Verdict.co.uk spoke to Carl Bradshaw and Nick Field at top legal adviser Kirkland & Ellis about the latest challenges around M&A in the technology industry and where the opportunities lie.
Carl Bradshaw tells GlobalData’s Verdict.co.uk: “Geopolitical uncertainty aside, the current wave of protectionism is a challenge. It can be seen in increasing restrictions on foreign direct investment, trade wars, enhanced sanctions and in some cases, obstacles to outbound investment.
This presents increasing execution risk for cross-border M&As and may to some extent result in the de-globalisation of deal making. Buyers may pursue more local targets in deals that are easier to predict the outcomes of.
“We are certainly in some interesting times, just as the unprecedented deal volumes that we have seen in the last few years was starting to feel like the “new normal”.
Many of our private equity clients tell us that if a storm comes they will run for opportunities rather than for cover. Given the disruptive force of technology and its capacity to reach across sectors, it is difficult to see how tech M&A will not continue to be at the forefront of global deal making.”
Nick Field tells GlobalData: “In a macroeconomic environment of some uncertainty we see a greater focus from acquirers on the characteristics of businesses that provide resilience to future economic shocks.
Whilst engaging thoughtfully with that topic requires a mindset that is less familiar following a period of benign economic conditions, for high quality differentiated business models it is rarely a barrier to a successful deal.
In a world that has generally become less certain over the last 24 months we have seen something of a flight to quality in the M&A market. Strategic acquirers and investors are both focusing greater attention on the highest quality assets, and willing to pay premium valuations for them.”
African Eye Report
