Cross-border M&A value highest in a decade

The value of global cross-border M&A transactions has reached a decade high of US$337 billion. This is a 13 per cent increase from the first quarter of last year. This comes despite a 10 per cent drop in the volume of cross-border transactions.

Allen & Overy partner Geoff Simpson said that there has been increased confidence in the mining sector off the back of rising commodity prices.

There has been a 142 per cent increase in the value of deals in the mining sector in the last year.

“Added to this, there is continuing demand, particularly from China, which is bolstering that confidence and looks set to continue,” he said.

“The huge increase in deal values for Q1 may somewhat overstate the level of recovery in the sector.”

“However, many now expect commodity prices to continue firming this year and next, and that will encourage banks and investors to get behind new projects and deals, further adding to the improving strength in the sector.”

While there is strong demand for Australian commodities in China , Allen & Overy’s recent report – Staying power: M&A Insights Q1 2017 – noted that the country is tightening its restrictions on outbound investment, targeting several types of investment for greater scrutiny.