In a retrospective look at 2016, analysts agree that last year was somewhat of a banner year for global M&A thanks to a number of compelling elements, including cross border endeavors, lower than average funding options and an uptick in China’s activity in the US and EMEA. This year’s activity is expected to remain at the same optimistic levels, without huge growth but without attrition either.

There are a number of uncertainties that hover over the mergers and acquisitions landscape that may shift the prevailing winds to some degree, however. These include President Donald J. Trump’s election and the resulting tax policy changes expected to occur in the US, the impact of Brexit on the UK and European Union and a potential slowdown in China’s activity. Three sectors to watch as the 2017 landscape settles are technology, oil & gas and renewable energy.

Technology

The technology sector is the darling of mergers and acquisitions trends’ pundits hand picking sectors right now, and it’s no wonder. The bywords of the sector are innovation and disruption. New technologies and the companies that introduce them are redefining the way we live and do business. Think Apple, Amazon, Facebook and Google. Cloud computing, software as service and the Internet of Things provide us new ways of doing things each day, from personal products that help us care for our families better to industrial and manufacturing applications that shave time and money off production lines and eliminate costly overhead.

In a survey by KPMG, 45% of respondents ranked technology as the sector to beat in regards to having the most M&A volume in 2017. Ernst & Young refers to the technology sector as “the perfect storm,” noting that “in just 176 days leading up to October 26, 2016, five of the 10 largest technology deals in history were announced, involving players from around the world.” This increase in volume, teemed with the fact that technology advances lead the way in many other sectors, make it the odds on favorite to watch in 2017.

Oil & Gas

Oil & gas is another sector poised for activity in 2017. CNBC reports that mergers in the US oil & gas sector ended up at $200 billion last year, with a continuation for activity expected in 2017. Ernst & Young report a 96% increase in year-over-year deal activity in this sector and predict it will be in the forefront for the long haul, spanning the next seven years.

Positive contributors to the oil & gas sector include global oil demand, trend toward supply and demand leveling and production companies focusing on scrupulously watching their production costs and operations processes to ensure future growth.

Renewable Energy

Posting a strong 2016, the renewable energy sector should prove promising in 2017 as well. In fact, an article by Deloitte asserts that “ the positive momentum achieved by the renewable energy sector will likely not abate.” As the marketplace continues to demand alternatives to fossil fuels, research and development in areas of solar power, wind power and other types of green energy will keep the door open for M&As in this sector.

A report by Price Waterhouse notes that global M&A volume has reached a decade high, with US numbers at a 45% increase year over year. They also note that interest is coming from across the globe and across buyers types, from corporate to institutional.

Ernst and Young note that just over $535 billion in dry powder stands ready to capitalize on M&As with most attention turned to to the US. This potential, along with a strong 2016 market make for favorable 2017 predictions with the technology sector leading the way.

Cornfield & Partners can help you navigate the 2017 M&A landscape as well as provide you with additional investment and market opportunities within the sectors of technology, oil & gas and renewable energy. For information, contact info@cornfieldpartners.com or
call us on +44 (0) 20 7692 0873.

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