Dealmaking returns

M&A Momentum Gaining Globally

by

October 31, 2013

Ernst & Young came out with an upbeat view on global M&A this week, reporting that corporate executives are about to resuscitate the flat-lining M&A market, as more than a third look to do deals.

 

According to EY’s ninth bi-annual Capital Confidence Barometer, a survey of 1,600 senior executives in more than 70 countries, revealed that strength in core fundamentals is leading over a third (35%) of companies to pursue acquisitions in the next 12 months compared to 25% a year ago.

 

The same sentiment was echoed earlier this month from another source that said that growing confidence amongst European companies will likely boost M&A in the coming months. At the recent Bloomberg Dealmakers Summit in London panelists said that the recent stability in the European economy should spur companies to acquire and sell assets in 2014. The pace of European transactions spurred by private-equity firms is also set to accelerate.

 

The volume of M&A in the third quarter climbed 42 percent this year to USD 674 billion this year, according Bloomberg. The figures were boosted by a mega-deal between Vodafone Group and Verizon Wireless for USD 130 billion, giving M&A totals in the telecommunications and technology industries a nudge upwards.

 

The IPO and equities markets, which are hot, feed the M&A market with further confidence, said the report. The IPO market has raised USD 17 billion so far this year, compared to USD 10 billion in the same period last year. The stock market trend that began in the US is moving toward Europe and barring no major geopolitical issue arising, the momentum will continue.

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