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M&A activity in Europe and North America is speeding toward the end of 2018, with more than 15,000 transactions worth a combined $2.4 trillion through the first nine months of the year. Dozens of high-profile deals were announced in 3Q and some key mega-deals closed, but both transaction value and volume overall are down YoY, as M&A activity proved vulnerable to rising interest rates in North America.

Our 3Q 2018 M&A Report digs into the data behind the robust quarter, including a breakdown of deals by size and sector, an exploration of the growing influence of private equity in M&A markets and a spotlight on the oil & gas industry. The full report is available to download for free, but for a look at the highlights, check out this collection of charts. Deal value on pace to hold steady on lower transaction volume M&A activity totaled $822.7 billion in 3Q, the second consecutive quarter with more than $800 billion in total value, as dealmaking continued to pick up after a sluggish start to the year. Some industry experts have labeled 2018 the "year of the mega-deal," with 45 transactions worth upwards of $5 billion apiece having closed through September 30. Last quarter also saw the closure of two $20 billion-plus deals: the acquisition of Abertis by Atlantia, and Keurig Green Mountain's billion purchase of Dr Pepper Snapple Group.
North America accounts for highest proportion of deal value and count in over a decade The North American and European markets have diverged so far this year, with activity in the latter receding, while the former stays on track to match prior years. In 2018, North America has accounted for 64.4% of deal value and 60.6% of deal count in the two regions. Both figures are well above the averages of the preceding decade, in which North American M&A accounted for 60.3% and 53.5% of deal value and count, respectively.
North American M&A activity on pace to approximate recent years In contrast to the slowdown occurring in Europe, M&A activity in North America is faring relatively well, though still dropping slightly. The 8,683 transactions and nearly $1.5 trillion deal value through 3Q are declines of 9.0% and 8.2% YoY, respectively. However, nine of the 10 largest M&A transactions announced or are in progress are targeting companies based in North America.
Smaller deals' proportion of overall M&A value dwindles The number of deals above $100 million in value has continued to grow this year, continuing a trend that began a few years ago. Similarly, the smaller deals are making up an increasingly lower share of the total deal value as well, with transactions under $100 million making up less than 8% of transaction value in 2018 thus far. In 3Q specifically, this smallest category accounted for 6.7% of all transaction value, compared with 7.6% in 3Q 2017.
IT on pace to complete more deals than B2C for the first time The information technology sector isn't on pace in 2018 to produce an outsized number of transactions relative to the past few years. However, the B2C sector's deal count has dropped sharply in comparison, and the decline puts IT on pace to surpass B2C in deal count for the first time since at least 2010. As of September 30, IT had a deal count of more than 2,600, while B2C came in with just under 2,450.
2017 a record year for oil & gas deal value Compared with last year's record-breaking performance, dealmaking in the oil & gas sector has fallen off significantly, particularly with respect to total deal value. Through September 30, M&A activity in oil & gas companies comprised 350 deals worth a combined $125.6 billion, YoY decreases of 23.6% and 49.1%, respectively. Despite the overall decline, the sector wasn't without newsworthy activity; one notable deal that closed included Concho Resources' $9.5 billion purchase of RSP Permian.
Oil & gas deal count slumps in spite of oil price recovery The price of oil is a major driver of company value within the oil & gas sector, but despite oil prices in 3Q reaching their highest point since 4Q 2014, deal count and deal value are both on pace to drop compared with 2017. PE-backed deal activity in oil & gas has risen, with the proportion of deals with a PE-backed target company at 13.7%, its highest share since 2010. However, deal count overall is projected to fall by half YoY and deal value by one-third.
2018 on pace for steep decline in corporate rounds Corporate rounds, which refer to minority investments by a strategic partner, are often used to build relationships that may ultimately end in an acquisition or a merger. After peaking with more than 1,000 such investments in 2015, the number has fallen sharply over the past few years, despite M&A transaction volume and value remaining fairly steady.
Proportion of technology deals more than doubled in the past decade Within corporate rounds, the IT sector has seen the largest amount of growth in terms of its share of deal count, going from just 10.1% in 2010 to 28.8% so far this year. The next largest share of transactions in 2018 has occurred in the B2B sector, followed closely by B2C, with those spaces accounting for 19.4% and 17.9% of the total deal count, respectively.