Evolving technologies keep M&A activity high

In the third quarter, the number of global technology M&A transactions grew to its seventh consecutive record. Although the aggregate value decreased compared to the second quarter, EY expects dealmaking strength to continue.

Disruptive technologies and the digital transformation of other industries have let to a new record number of mergers and acquisitions of 1,069 deals in the third quarter of 2015. This is the seventh consecutive quarter with a new record after the dotcom bubble. During the third quarter, $65.4 billion in aggregate transaction volume could be observed by Ernst & Young. So far in 2015, $269.7 billion have been recorded, which is already 14 percent more than in 2014.

Transactions in the field of the “internet of things”, big data analytics as well as payment and financial services contribute the most to the aggregate value of deals in the third quarter. Cloud and software as a service, smart mobility and security technologies continued as deal drivers. The volume and value of non-tech buyers increased in the third quarter again. On the other hand, cross-border aggregate deal value decreased by 45 percent compared to the second quarter of this year.

“Disruptive technologies and digital transformation in all industries will continue driving blockbuster tech M&A next year. But megadeals above $20 billion will slow or stop, and creative dealmakers will drive new deal forms,” says Jeff Liu, Global Technology Industry Leader, Transaction Advisory Services at EY, in the report “Digital disruption keeps dealmaking strong”. At the current dealmaking pace, the all-time high of a transaction volume of $412.4 billion recorded in 2000, the high of the dotcom bubble, could be reached, says the report.