Also high on the agenda of the planned negotiations are the healthcare, consumer products and automotive sectors
Analysts expect mobility in the technology and telecommunications sectors over the next twelve months, with the two sectors at the center of upcoming acquisitions and mergers. In addition to these two sectors, high on the agenda for business deals over the next year will be the healthcare, consumer products and automotive sectors.
According to Ernst & Young’s “Global Capital Confidence Barometer”, 4 in 10 companies worldwide will pursue acquisitions in the next 12 months, recording the highest percentage in the last three years. As the survey finds, improved market conditions and an increase in the number of deals under consideration are expected to lead the number of Mergers & Acquisitions (M&A) deals to the pre-crisis levels of 2006, after a 5-year decline.
In fact, almost two-thirds (60%) of respondents expect a further increase in the number of deals over the next 12 months, following an already relatively good year for M&A.
The survey found that deals under consideration have increased by 30% since April. Additionally, 66% of executives expect their number to increase further in the next 12 months, double the number who made a similar prediction six months ago. More than 50% of respondents also expect an increase in aggressive acquisitions.
Top investment destinations
According to the "Global Capital Confidence Barometer", which captures the views of 1,600 senior executives in more than 60 countries, Brazil, China, India, the United Kingdom and the United States are expected to be the top five destinations for investment choices.
Countries such as the US, UK, China, Japan, India and Australia will be the main buyers. Furthermore, the research shows that interest in the coming months will shift to mid-sized deals, while in 2014 large high-profile deals dominated. Now, the focus on costs is encouraging business deals that enhance core activities. While the majority of companies are focused on acquiring complementary businesses, over a third (37%) still estimate that they will proceed with transformational deals, with large US companies standing out in this area. Therefore, while large deals will remain in the spotlight, the hitherto sluggish market for mid-sized deals will come into play dynamically.
Optimism
The estimates for stimulating business deals are based – to a large extent – on the stability of both the economic environment and company valuations. The gap between sellers’ and buyers’ valuations remains stable, while, according to 50% of executives, this small gap encourages the completion of deals in the short term. The intense M&A activity is also supported by the climate of confidence in company boards in the international macroeconomic environment.
The number of executives who describe the global economy as stable has almost doubled in a year (from 24% to 44%). Geopolitical issues remain the biggest concern for 37% of executives, up from 30% six months ago. However, this concern is offset by an impressive increase in positive sentiment towards corporate earnings, from 43% to 77% in 12 months, and a tripling of confidence in short-term market stability, from 21% to 64% in the same period.
Source: protothema.gr
