2010 M&A Rebound To Come Under A Renewed Structure

Although analysts see a continued uptick in M&A activity in 2010, more importantly, on a qualitative level we should see a continued shift in the way M&A deals are structured. With credit becoming more freely available, M&A deals have undergone a significant transformation in 2009. The deals completed this year have been on average smaller; stock has become king (being used in 41% of European M&A deals); and we have seen a substantial shift away from financial sponsors - typically private equity investment funds engaging in leveraged buyouts - and towards strategic buyers. And this transformation is set to continue into next year. Showing the M&A market is far from out of the woods yet, industry practitioners expect to see significant activity around distressed assets in the next 12 months, according to Mergermarket. And 63% of M&A practitioners surveyed by Mergermarket expect the real estate sector in particular to experience high levels of distressed asset sales next year. We are also likely to see an upturn in the volume of both strategic deals, owing to continued low valuations, and portfolio reshapings, from companies adopting a 'shrink to grow' approach.

To read the full article, please choose one of the following options: