In most regions of the world, including offshore, the volume of deals has fallen back from the levels seen in the latter half of 2017. At the same time, value is firmly up and firms in the region as well as in Western Europe and North America in particular are benefitting from a resurgent world economy.
Companies, regardless of industry, have sought to head off technological disruption and bolster revenue growth through acquisitions. Strong fundamentals, including high levels of corporate cash and affordable and accessible credit, are undoubtedly underpinning activity. Relatively high share prices have also provided companies with a currency to complete stock deals.
M&A also depends on confidence and the markets continue to remain resilient in the face of several potentially negative factors; threatened trade wars, Brexit, unrest in the Middle East and unpredictable domestic politics, to name but a few. Dealmakers remain eager to grasp chances to make additions, sell-off inessential subsidiaries and complete strategic tie-ups to propel growth.
In the midst of this, the offshore region continues to play an important economic function. A recent research paper noted that by mitigating instances of double and triple taxation, offshore centres raise aggregate investment and we continue to see a very wide range of countries and industries taking advantage of these efficiencies.
From a technical perspective, M&A tends to follow a cycle of activity levels and the sustained bull run inevitably leads to speculation over a future retrenchment. We expect the second half of the year to be busy, but no one can afford to ignore the threats posed by rising interest rates, increasing protectionism, a possible trade war, seemingly unsustainable valuations and a volatile stock market. However, companies that are prepared to move swiftly and have clear targets and prices in mind will undoubtedly meet with success.
We hope that you find our summary of interest. Please download the report to access the summary version of our latest Offshore-i report. Please click here to visit our dedicated Offshore-i page.