ZEW-ZEPHYR M&A Index – Worldwide Upswing in M&A Activities Persists

The upward trend in worldwide mergers and acquisitions (M&A) that started about a year ago continues. This is the result of calculations by the Centre for European Economic Research (ZEW) based on the database of Bureau van Dijk (BvD).

Rumours about worldwide mergers and acquisitions have recently increased. The remarkable number of rumours is now reflected in the number of completed M&A transactions. In October 2014, the ZEW-ZEPHYR M&A Index reached a value of 136 points. The traditionally high December figures left aside, this is the highest value recorded since October of 2008.

The 12-month moving average of the index keeps growing as well and currently stands at a three-year high of 126 points. The notable recovery of M&A business is mainly due to the continuous increase in M&A transactions in North America since January 2013. Moreover, the dynamic M&A activities in the US market have been accompanied by a surge in mergers and acquisitions with targets in Central and Eastern Asia.

The large number of rumours about upcoming mergers and acquisitions indicates a further positive development. Rumours are considered to be a suitable indicator for future developments in the M&A market.

Information about the ZEW-ZEPHYR M&A Index

The ZEW-ZEPHYR M&A Index is calculated monthly by the Centre for European Economic Research (ZEW) and Bureau van Dijk (BvD) and has been tracking the development of mergers and acquisitions completed worldwide since the beginning of 2000. The ZEW-ZEPHYR M&A Index is based on the number and the volume of global mergers and acquisitions recorded in BvD’s ZEPHYR database. The index uses the monthly rates of change of both the volume and the value of M&A transactions, which are combined and adjusted for volatility and inflation. The index provides a much more precise picture of the level of worldwide M&A activities than a simple observation of transaction volumes, since a company's stock market valuation has a strong influence on the transaction value, the more so because many acquisitions are paid for through an exchange of shares. Consequently, the share price would have a disproportionately strong influence on the assessment of transactions. If the total transaction volume is attributable to a larger number of transactions within one month, the value of the M&A Index increases even though the aggregate transaction value remains unchanged.

For more information please contact

Sven Heim, Phone +49/621/1235-183, E-mail heim@zew.de