The merger and acquisition industry has good news to reveal for this year. According to almost 63% professionals, there will be higher levels of activity in the market. This statement is based on a survey that had a sample size of over 1,000 professionals, advisors and investors belonging to the M&A industry. 36% of the respondents of the survey also claim that their clients will finalize a divestiture.
The survey has been computed by a prestigious name in the M&A sector that claims most of their clients are going to indulge in one acquisition and for some companies, it can even be more. The sample size comprises of prestigious corporations in the country, investment banks and private equity firms who presented their opinions about the merger and acquisition industry for this year through a well-prepared set of questions.
According to a professional employed at the company that conducted the survey, the market is favorable and will pave way for more M&A activity. The prime reason behind this is the high amounts of cash on corporate balance sheets, a better overall economy and reduced interest rates. There is another reason more deals with be made this year; companies have become smarter and have realized that they can expand their core business functions and operations through acquisitions, and achieve a substantial amount of growth overall.
Though M&A activity will be seen in several sectors in the market, there are some that received a greater number of responses like the telecom industry, which received 44% votes. Next in line are healthcare and pharmaceutical companies with 41% and financial services are rated number three with 28%. The number fourth and fifth slots are taken by financial services and the energy industry, each rated at 28% and 27%, respectively.
75% of the respondents expect their companies to acquire another organization this year. Last year, the figures were only half of this.
Based on the responses of the survey, large cash reserves is the motivating factor behind the increased number of deals. This was felt by 25% people whereas another 17% believe that emerging markets will make their contribution to the M&A industry. Another 17% stated an increase in clientele pool to be the reason.
How many of these expected figures will turn out to be true? Time will tell.
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