The number of mega-acquisitions valued at USD 10 bn or above more than doubled worldwide in the 1Q 2024, with 11 transactions totaling USD 215 bn taking place over the first three months of 2024, compared to five transactions worth a total of some USD 100 bn during the same period last year, the FinancialTimes reports, citing data from the London Stock Exchange Group.

The growth was driven by large-scale transactions in the US in the energy, tech and financial sectors, reflecting companies’ appetite for “capitalizing on the market conditions to accelerate growth,” Citi’s head of investment banking Tyler Dickson told FT.

This growth indicates that the market is on course to recover from its “lengthy drought”, following a period of stagnancy in M&A activity on the back of the Covid-19 pandemic and the ensuing market volatility, which led to the market shrinking to a decade-low.

While large-scale transactions are seeing an uptick, the total number of transactions globally fell 31% over the first three months of 2024. However, the overall value grew to USD 690 bn, marking a 30% y-o-y increase.

What spurred the rebound? M&A activity surged as investors anticipate rate cuts from central banks, expected to come in June. The expected rate cuts have reduced financing costs, facilitating takeovers, in tandem with a resurgence in IPO activity.

By region: The US made up the lion’s share of takeover activity, growing 59% y-o-y to USD 431.8 bn. The European market also jumped more than 60% y-o-y to USD 127 bn. Meanwhile, transactions in the Asia-Pacific region fell 28% y-o-y, amounting to USD 90 bn.

The market is expected to expand further: Bankers and M&A firms foresee that the M&A momentum will continue to grow throughout the year as companies pursue more takeovers, as fears of recession diminish and economic indicators suggest that the global economy is headed to a “soft landing” and that inflation is under control. “Boards and management teams feel more comfortable about the future,” Reuters quotes co-head of global M&A at Bank of America Ivan Farman as saying.

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THE CLOSING BELL-

The EGX30 fell 2.4% at Thursday’s close on turnover of EGP 2.7 bn (45.7% below the 90-dayaverage). Regional investors were net sellers. The index is up 10.7% YTD.

In the green: Palm Hill Developments (+2.4%), GB Corp (+1.0%), and Orascom Construction (+0.4%).

In the red: Orascom Development Egypt (-6.5%), Fawry (-6.5%), and Delta Sugar (-6.3%).

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