As merger & acquisition (M&A) becomes a key growth strategy for corporates, a report from EY has identified five key trends expected to define the M&A transaction market globally in 2017.

M&A is now a cornerstone of today’s corporate growth strategy, says the report, alongside joint ventures, alliances and partnerships. It found that 2016 was one of the best years ever for M&A dealmaking, with US$3.5 trillion-worth of M&A deals done globally. Although this is 17 per cent less than 2015, it is still greater than levels in 2014 and 2013. The EY report expects M&A transactions to remain at healthy levels throughout the coming year.

The five trends for 2017 identified in the report are:

1. Future-proofing: today’s deals can be tomorrow’s game-changers

EY writes: “The pace of future-proofing business models will accelerate as companies continue to adapt to digital transformation, the blurring of traditional industry lines and changing consumer preferences. Of all the deals last year, 9,616 were cross-sector transactions worth a combined US$937b – up 11% compared with 2015 – signalling that executives are already acquiring the innovation that will fuel the re-invention of their own business models and their sector more broadly.”

2. Cross-border deals will be in ready supply in 2017

EY writes: “In 2016, Chinese buyers dominated the world headlines, with the value of those deals alone totalling US$210b, up 127% against 2015. Overall, last year saw 8,731 cross-border deals worth a combined US$1.3t (37% of all value). In 2017, other countries will likely join the race to buy into pockets of growth and secure supply chains in an era of increasing geopolitical uncertainty.”

3. Currency converts into attractive timing of deals

EY writes: “The timing of deals can be affected by currency movements and the downward pressure on the British pound and the euro could make assets in Europe more attractive.”

4. Regulation: yea or nay?

EY writes: “Last year saw a record amount of deals being pulled due to regulatory and antitrust concerns. In 2017, the regulatory aspect of dealmaking will be in the spotlight, particularly in the US where the presidential election result could see a relaxation of controls. There is a growing trend toward creating national economic champions in some countries to contest in the increasingly competitive business world. Regulators in developed markets, especially the US and Europe, may look to address this trend in a global marketplace.”

5. Acceleration of portfolio recycling will be in vogue in 2017

EY writes: “Deal pipelines remain healthy despite the geopolitical uncertainty and rapid change, pointing to equally strong – if not stronger – M&A activity in 2017.