Global M&A hit a post-crisis high in 2014

Regional M&A comparison in US$

We aren’t surprised to see M&A activity climbing, and, as we discussed in an earlier post (see M&A activity takes off, 3 June 2014), that may continue over the next couple of years for several reasons.

  • Corporate liquidity is still high
  • Although softening, financing terms are still attractive, as debt markets remain mostly open and supportive.
  • Political and regulatory uncertainty is slowly subsiding, enabling executives to think strategically and look further out into the future.
  • Acquirers’ stocks are rising when investors reward smart, calculated moves. This encourages other corporate management teams to be proactive.
  • Activist shareholder activity is clearly on the rise.  This has been and will continue to be a driver as activists have put up sterling performance numbers and are attracting large net flows of assets to manage.
  • The rout in oil and commodities will create M&A activity as sellers eventually realize the reduced longer-term outlook for their business.

The dramatic shift in the US dollar may slow activity as participants have to reassess the value of their operations in a different currency setting.

James M. Boyd, The Boston Company Asset Management

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