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Ideas are the new currency. Mergers and Acquisitions Quarterly

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Ideas are the new currency. Mergers and Acquisitions Quarterly

Second Quarter 2016

U.S. M&A Activity

The M&A market slowed in the second quarter of 2016. Total transaction volume declined 15.7% on 2,934 total transactions compared to 3,481 total transactions in Q2 2015. A number of factors contributed to the downward trend, including concerns over economic growth in China, political uncertainty in Europe, and weak commodity and oil prices.

Transaction values in the second quarter of 2016 also declined, representing a decrease of 22.3% year-over-year on $413 billion of transactions. While $1 billion-plus transactions showed greater resiliency than the broader M&A market, mega transactions (greater than $10 billion) saw a meaningful decline from the lofty levels of 2015. Last year's largest announced deal, Pfizer's approximately $160 billion proposal to acquire Allergan, was abandoned in April 2016 after the U.S. Treasury introduced new rules to curb tax inversions, used by companies seeking lower-tax headquarters overseas.

However, the market experienced a number of large announced deals in Q2 2016, including Abbott Laboratories’ $30.7 billion proposal to acquire St. Jude Medical and Microsoft’s $26.2 billion bid for LinkedIn, both contributing to a rebound in activity since the first quarter of 2016. Quarterover-quarter transaction value soared 43.2% while volume was up about 1% for the same period.

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