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Study: M&A Market Could Cool

Although the mergers & acquisitions market is on a pace to exceed $3 trillion in worldwide deal value in 2015 -- its best year since 2007 -- some leading U.S. dealmakers are beginning to doubt if that pace is sustainable, according to research from law firm Dykema Gossett PLLC.

According to Dykema’s 11th Annual M&A Outlook Survey, only 37% of  respondents to the survey said they believed the M&A market would strengthen in the next 12 months down from 59% in 2014. About 20% said they expected the market to weaken, compared to 9% in 2014.

 While the majority of respondents expected no change in M&A next year, the concern is the most dealmakers have shown in the survey in years, according to Dykema.

In the U.S., the law firm said M&A concerns reflected those for the overall U.S. economy – just 48% of all respondents has a positive outlook for the overall U.S. economy over the next 12 months, the lowest level since 2012.

Pockets of intense deal activity remain – healthcare and technology were at the top of the list, while media ranked No. 12. According to Dykema, healthcare M&A reached $484.2 billion through early September, up from $274.5 billion for the same period in 2014.

Technology deals experienced a similar jump, rising from $268.3 billion in early September 2014 to $356.2 billion through the same point this year.

"M&A activity in 2015 surged for much of the year, but respondents clearly are wondering how long it can last,” co-leader of Dykema’s M&A practice Tom Vaughn said in a statement. “Many of the strong overall results were driven by megadeals, but we agree with the findings that while the outlook for the next year is not as strong as it was a year ago, there is still a great deal of positive momentum in the M&A market.”

Dykema distributed its M&A Outlook Survey via email during August and September to a group of senior executives and advisers including CEOs, CFOs and other company officers. The 147 respondents to this survey represent a cross-section of M&A professionals and advisers with a diverse group of professions and more than a dozen sectors represented, including healthcare, technology, industrial/manufacturing and financial services. Respondents represent companies whose annual revenues range from under $1 million to more than $1 billion