It’s been said many times before, but 2014 may well be seen as the year in which the mergers and acquisitions market returned to its previous levels, at long last. The deals being done are not necessarily the type or size we saw before 2008, so investors will need to consider their options if they intend to jump back into the fray.
The M&A market is on the move. According to Mergermarket, global M&A was valued at US$599.1 billion in Q1 2014, up 33.2 percent from
the same period last year. The average deal size over the same
period was US$ 374.4 million, 33 percent greater than in Q1 2013.
A closer look at the figures reveals an interesting trend: deal volume is slightly down, but deal value is up. Fewer, bigger deals imply that investors are moving away from opportunistic purchases and focusing
on larger, longer-term plays.
For Oliver Brahmst, a partner in White & Case’s
M&A practice group in New York, the reasons behind these trends are clear.“On the buy side, the main driver of M&A in the past two to three years has been private equity (PE),” he says. “These players have a trillion dollars in equity to invest. Add a couple of trillion
dollars of debt to that, and you’ve got a US$3 trillion war chest.”Read More at White & Case