Each quarter, IntraLinks Holdings Inc.’s (:ILN/A) Deal Flow Predictor (DFP) provides a forward look at mergers and acquisitions on a global basis. The latest DFP results call for a leveling off of M&A activity at least through Q3 2016 with the possibility of a slight overall decline, mostly due to uncertainty in a number of areas.
As part of its quarterly DFP report, IntraLinks also conducts a Sentiment Survey of more than 1,500 global M&A professionals. This time around, among questions asked of respondents was this one: “How do you believe a Donald J. Trump presidency would affect M&A in your region?”
Related: Playing the Doha Talks Collapse
Matt Porzio, Vice President, Strategy & Product Marketing at IntraLinks told Woo Trader that in Europe, the Middle East and Africa (EMEA), Asia Pacific (APAC) and Latin America (LATAM) more than 70% of respondents felt a Trump presidency would have a negative impact on M&A activity in their region.
“A lot of that,” Porzio said, “is their media’s interpretation of some of the sensationalism. It’s like a game of telephone and they think Donald Trump is going to shut down the border and that the U.S. is not going to be a global economic player.”
Porzio noted that just 46% of respondents in North America (NA) said they believe that, if elected, Donald Trump would have a negative impact on M&A activity in their region.
The lower 46% negative number on Trump in North America was likely because “dealmakers here have a better, more informed understanding of how American politics actually works,” according to Porzio.” In other words, he said, they realize the American President simply isn’t that powerful.
Other Presidential Players
Survey results for others in the race were also interesting. Bernie Sanders was 73% negative in North America. Porzio believes that’s because respondents felt Sanders comments about Wall Street in particular, would be a negative influence on M&A.
Interestingly, in Europe and in Asia a Hillary Clinton or Bernie Sanders presidency was seen as having “no impact” on M&A.
By way of explanation, Porzio said respondents likely felt, “America has had a Democratic administration for two terms. M&A has grown significantly. Therefore, if another Democrat goes in the White House, M&A should be fine.”
Overall, the most positive impact any candidate received in any region was seen by Hillary Clinton. In EMEA 56% of respondents believe she would have a positive impact on deal making.”
Said Porzio, “I believe that is (seen as) a continuation of the current environment.”
What Really Matters
Of all the factors mentioned, including the American political climate, the Chinese economy, oil and commodity prices and a possible Brexit from the European Union, Porzio said he felt one stood out.
“I think the energy market, oil volatility, is probably the biggest global disruption,” Porzio said. “It has had an effect on energy M&A but also flowing into other sectors.”
“The rest of the list,” he said, “is more regionalized. This includes the U.S. Presidential elections.”
Related: What Is Sector Rotation?
Summing Up M&A
According to Porzio, the Americas are getting back to normalized levels of M&A. Latin America suffers due to Brazil. Europe and Asia continue to grow, albeit not at the pace they were before.
“This is OK,” he said. “I think we’re going to look back on 2016 and say this was another good year for M&A. It wasn’t the same from a value perspective, but overall with all the uncertainty, with all the things happening, it didn’t fall off a cliff.”
To see the full IntraLinks Deal Flow Predictor report, click here.