LONDON (AP) – In a year that’s been awash with multi-billion dollar corporate deals, the number and value of mergers and acquisitions is set to grow further, reaching pre-crisis levels over the coming 12 months, consulting firm EY said Monday.
In its biannual Global Capital confidence barometer, EY said global M&A is on course to return to 2006 levels in the next year thanks to improvements in market conditions. Companies started getting reluctant to do deals in 2007 when the credit crunch really started. The following year’s global financial crisis and subsequent recession saw M&A activity come to a near standstill.
However, the appetite for deal-making has picked up over the past couple of years as the world economy has recovered and stock markets, particularly in the US, have bounced back on growing confidence about the future. This year has seen a flurry of big announcements, particularly in the US, including AT&T’s $48.5 billion takeover offer for DirecTV and Facebook’s $19 billion bid for WhatsApp.
EY’s survey found that 40 per cent of companies anticipate pursuing acquisitions in the next 12 months. That’s the highest level in three years.
It said the deals will not be confined to big names. In fact, some of the biggest activity will likely come from smaller firms seeking to strengthen their core businesses – it expects a big pick-up in deals valued at $250 million and under.