2013 was a great year for M&A activity. Many deals were announced, and successfully implemented. The food merger, the integration of the two major airlines, the partnership of the telecom companies; 2013 definitely saw a lot of happenings in the merger and the acquisition industry. So what will it be in 2014? Will the deals dry up, or are there going to be more of them?
According to the industry experts, 2014 is going to be another great year, and they have plenty of good reasons to give in this regard. Yet some of the analysts are not so hopeful and they fear some negative factors can limit the growth of the market.
Considering the brighter side of the picture, here are the main reasons 2014 will see plenty of things happening in the M&A industry.
- Greater leverage levels have been enabled by the favorable lending environment and credit markets
- The interest rates may have risen, but even in 2014, they will still be historically low
- If the market continues to behave strongly, many companies that are privately owned may seek liquidity. The stats claim this number to be around 18,000 in all.
- The stock market has put up good performance and that may encourage companies to combine in order to have a bigger market share
- M&A activity has now been extended beyond the borders as well
Despite the pros, some of the industry experts are a bit skeptic. When asked about this, they stated that the economy of the country is still uncertain, and can turn direction anytime. The political conditions do not favor the market, heightening the pressure in some of the areas. Debt also plays its role, and encourages potential dealmakers to back out and change their decision. Moreover, shareholder activism has increased, because many companies are not that keen to pursue a merger.
2013 was good, but some of the analysts still feel it could have been better. At least that is what they had forecasted at the start, but not all of their predictions came out to be true. Still, it cannot be ignored that 2013 was still better than 2012.
Let us just wait and watch what happens. Hopefully, 2014 will be an incredible year for the M&A industry.
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