M&A set to surge following Vodafone’s bumper deal
Following the confirmation of Vodafone's $130 billion-deal with Verizon on Monday, merger and acquisition (M&A) activity is set to boom as appetite for mega deals returns, according to an upcoming report.
The volume of global M&A deals is expected to increase by 6 percent in the second half of 2013 as the industry wakes up from a "relative slumber," consultancy firm Deloitte said ahead of its M&A Index, to be published next week. It comes after Monday's mega-deal, which is the third largest M&A tie-up on record, behind Vodafone's $203 billion takeover of Germany's Mannesmann in 1999 and AOL's $181 billion acquisition of Time Warner in 2000.
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Deloitte forecasts 14,652 M&A deals in the second half of the year worldwide, led by a resurgence in deal activity in the U.S. and the confidence boost provided by the euro zone exiting the longest recession in the region in over 40 years.
The firm's research also reveals that deals in the U.K. are up 40 percent in the last three months, compared to the first quarter.
Vodafone was not the only big deal announced this week, with Microsoft also agreeing to buy Nokia's mobile phone business for some 5.4 billion euros ($7.2 billion) on Tuesday. Nokia shares rose by 40 percent on the news, whereas Microsoft's slipped more than 5 percent.
"The exciting and big news of a couple of deals this week means a lot of people are back at their desks, and it may be a good omen," Richard Lloyd-Owen, head of M&A for Deloitte in the U.K., told CNBC on Wednesday.
"The fire power is there for M&A, in terms of the cash some companies have got and if a company needs the debt, it is relatively straightforward and economic to get it. The real thing is going to be about confidence, when you see a couple of big deals get done, it does create a sense of confidence."
(Read more: Sell Nokia on Microsoft deal, says Jim Cramer)
Lloyd-Owen added that while the "return of M&A" has been trumpeted before, a combination of increasing positive sentiment, upbeat economic indicators from advanced economies and buoyant capital markets could break the cycle that has prevented deal volumes getting off the ground.
"With the third largest M&A deal in history confirmed on Monday, the stage is set for up to 30,000 transactions before the end of the year according to the Deloitte M&A Index," he said. The report will be published on Monday.
—By CNBC's Jenny Cosgrave: Follow her on Twitter