M&A outlook Top M&A markets and their key characteristics China United United States Kingdom Even amid headlines over its recent The M&A market in the US is expected The United Kingdom has long been a economic slowdown, mainland China to maintain its upward momentum and favored destination for foreign fi rms retains its status as an attractive continues to be attractive to foreign accessing the wider European Union. With destination for M&E executives. This is investors. Positive US economic strong domestic growth in 2015, similar due to levels of growth that remain very fundamentals and low interest rates levels forecast through 2016 and a focus strong relative to the global economy. The are all strengthening boardroom on reducing red tape, the UK should be Chinese Government now targets annual confi dence. US companies continue to able to maintain its unique status as a growth at about 7%, down from previous perform exceptionally: The majority of global M&A hub. rates that ranged as high as 10%. With the S&P 500 beat earnings estimates For M&E, the UK’s projection of a US$13b economic rebalancing a stated Chinese in the fi rst half of 2015. This has kept internet and mobile advertising market in policy, further investment opportunities investor morale up and driven M&A. 2017, in addition to its political stability should arise for inbound investors. As for Although slipping to second in top and low regulatory risk, makes it an outbound investment, lower domestic destinations, M&E companies still attractive investment destination. Deal growth, combined with increasingly see the US as having a number of activity is likely to remain stable as M&E assertive, cash-rich Chinese companies, high-quality targets that can give companies increasingly focus on acquiring should compel China-based enterprises to them a competitive advantage in a rights to compelling content and building invest capital overseas. multi-platform world. As the value digital businesses. Information services From an M&E perspective, the sector of compelling content rises, M&E companies’ cash-generative and resilient remains ripe for consolidation as the companies continue to divest their non- business models will continue to attract number of Chinese M&E players continues strategic assets and re-deploy capital M&A attention. to rise. toward producing better content and distribute it more widely. Furthermore, companies are still favoring buying — instead of building — digital properties (such as multichannel networks) to attract highly mobile, digital-fi rst, millennials and build synergies with their existing content. 14 | Capital Confi dence Barometer