Global M&As Outlook $2018$ :

The global M&A market remained strong in $2018$ with announced transaction volumes reaching $$4\mathrm{.}1$ trillion, the third highest year ever for M&A volumes. Announced volume$$in the first half of $2018$ was robust, representing the second highest first half of all time $($$$2\mathrm{.}4$ trillion$).$ Activity was largely driven by $$megadeals$($greater than $$10$ billion in size$).$ Thirty megadeals were announced in the first six months of $2018$ the highest first$-$half megadeal count on record $$ compared with $14$ deals in the first half of $2017.$ The number of megadeals began to normalize throughout the second half of the year, although they continued to be a significant driver of activity in $2018($overall up $38\%,44$ deals in $2018$ compared with $32$ in $2017,$ the second highest in the past $10$ years$).$

While megadeals were a large driver of M&A announced dollar volumes in $2018,$ the count for deals greater than $$250$ million also increased by $7\%$ from $2017,$ with activity remaining robust across all deal types. Activity was brisk across domestic and international deals, strategic and private equity, and across all sectors$,$ with technology $(17\%)$ and healthcare $(12\%)$ representing the largest contributors to global volume in $2018.$ Private equity funds continued to have ample $$dry powder$$ and deployed this capital throughout $2018$; sponsor buy$-$side volume was up $9\%$ YOY.

Several of the key drivers and catalysts of M&A have continued from prior years.$$Positive global growth, improving cash flows, strengthening balance sheets, low cost of debt, investor support and CEO confidence all continued to boost M&A activity. The biggest new tailwind this year was the implementation of tax reform in the U$.$S$.,$ which helped generate incremental cash flows and provided access to overseas funds.

Innovation, disruption and the need for growth also contributed to M&A activity,$$driving change across industries, geographies and organizations. An accelerating rate$$of disruption has driven the need to act with urgency. As a result, new consumption patterns, new platforms and new business models are resetting the basis of competition, redistributing industry economics and reallocating value. We$$ve seen a drastic increase in the technology sector over the past decade, more than doubling its share of the overall M&A market $($from $6\%$ in $2007$ to $17\%$ in $2018)$ as the sector continues to innovate to meet changing demands.

While geopolitical uncertainty was prominent throughout the year and created many headlines, it had limited effect on deal volumes in the first half of the year but may have contributed to the deceleration of activity toward the end of $2018.$ Meanwhile, cross$-$border M&A volume remained strong, accounting for $30\%$ of the total M&A market, but with a different mix: China outbound M&A continued to decline $($down $23\%$ YOY$),$ while Japan outbound M&A was robust throughout the year, with a record $$184$ billion in announced volume and a record number of deals larger than $$1$ billion $(30$ deals in $2018$ versus $18$ in the previous year$).$ However, Japan$$s activity benefitted disproportionately from Takeda Pharmaceutical$$s acquisition of Shire for $$81$ billion.

The regulatory environment remained challenging as large deals took longer to close, including Monsanto$/$Bayer $(746$ days$),$ Linde AG$/$Praxair $(681$ days$)$ and Time Warner$/$AT&T $(601$ days$),$ or were withdrawn entirely in the case of Qualcomm$/$Broadcom$,$ NXP$/$Qualcomm and Ant Financial$/$MoneyGram$.$ Meanwhile, regulation of foreign investment in the U$.$S$.$ continued to increase as Congress expanded the range of transactions governed by the Committee on Foreign Investment in the U$.$S$.($CFIUS$)$ in August.

The U$.$S$.$ equity market continued to climb throughout $2018$ and reached record levels. However, its performance in Q$4$ partially relieved investor concerns on overpaying for assets and has presented buying opportunities for potential acquirers. After the P$/$E ratio of the S&P $500$ hit its peak at the beginning of $2018,$ its pullback has allowed potential acquirers$$to pay a premium without breaking new ground on price.

China remains active in the global M&A market :

With the backdrop of a Sino$-$U$.$S$.$ trade war and heightened CFIUS scrutiny, China$$s outbound M&A volume in $2018$ suffered its second straight year of decline $(23\%)$ after the $$super$-$peak$$ in $2016.$ Despite this decrease, $2018$ China outbound M&A volume was still roughly one$-$third higher than the levels before the $2016$ peak in terms of total deal values.

Moderation in China$$s economic growth continues to drive the need to identify attractive growth opportunities abroad. Reasonably abundant capital availability and financing alternatives still enable Chinese acquirers to have strong purchasing power. There were many large$-$scale outbound transactions in $2018,$ including ANTA Sports$$ proposed $$6\mathrm{.}4$ billion acquisition of Amer Sports. Recently, Jingye Group has announced on Monday $(11/11/2019)$ that it had agreed a deal to rescue British Steel, the UK$$s secon